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WTI oil falls to 1-week low after U.S. housing data disappoints

Published 09/22/2014, 10:40 AM
Updated 09/22/2014, 10:40 AM
WTI oil futures slump after U.S. housing data disappoints

Investing.com - West Texas Intermediate oil futures fell to a one-week low on Monday, after data showed that U.S. existing home sales fell unexpectedly in August.

On the New York Mercantile Exchange, crude oil for delivery in November hit a session low of $90.78 a barrel, the weakest level since September 15.

Prices recovered to last trade at $90.88 during U.S. morning hours, down 77 cents, or 0.84%.

Futures were likely to find support at $89.76 a barrel, the low from September 15 and resistance at $92.24, the high from September 19.

The National Association of Realtors said that existing home sales declined 1.8% to a seasonally adjusted 5.05 million units last month from 5.14 million in July.

Analysts had expected existing home sales to rise 1% to 5.20 million units in August.

Meanwhile, concerns about weak demand and ample supplies continued to weigh.

Total U.S. crude oil inventories stood at 362.3 million barrels as of last week according to the U.S. Energy Information Administration, the highest level for this time of year since 2012.

Elsewhere, on the ICE Futures Exchange in London, Brent oil for November delivery declined $1.34, or 1.37%, to trade at $97.05 a barrel.

London-traded Brent prices have slid in recent weeks on concerns that global supply remains ample while demand remains weak.

Oil traders looked ahead to key Chinese economic data later this week to gauge the strength of the world’s second largest economy.

The next slice of Chinese economic data to come out will be the HSBC preliminary purchasing managers' index for September, due on Tuesday. The report is expected to show that factory activity deteriorated to a 4-month low of 50.0 this month from August’s reading of 50.2.

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China’s Finance Minister Lou Jiwei reiterated that policymakers in Beijing will not make major policy adjustments in response to individual economic indicators.

The comments were made at a meeting of finance ministers and central bank governors from the G20 countries in Australia over the weekend, according to a statement from the People's Bank of China.

Lou’s comment dampened speculation that China will increase stimulus to meet this year’s growth target of 7.5%.

The Asian nation is the world's second largest oil consumer after the U.S. and has been the engine of strengthening demand.

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