WASHINGTON (dpa-AFX) - U.S. crude oil ended lower on Monday, after some tepid, below expectation manufacturing activity data from China overshadowing the grim situation in eastern Ukraine. The conflict in eastern Ukraine appear to be further deteriorating amid reports of fierce fighting between government forces and pro-Russian fighters.
News reports said Ukrainian forces were involved in some fierce battle with pro-Russia fighters equipped with heavy, large-caliber weapons. There has been unconfirmed reports of casualties on both sides, with the Ukraine interim interior minister confirming the death of four army officers.
China's manufacturing sector contracted for the fourth successive month in April which exceeded the preliminary estimate, survey data showed Monday. The slowdown in production reflects fewer new orders in April. Data suggest sluggish domestic demand predominantly led to the fall in total new business, as new export orders declined only slightly.
Light Sweet Crude Oil futures for June delivery, the most actively traded contract, dropped $0.28 or 0.3 percent to close at $99.48 a barrel on the New York Mercantile Exchange Monday.
Crude prices for June delivery scaled a high of $100.44 a barrel intraday and a low of $98.91.
On Friday, crude oil futures ended higher on some upbeat U.S. jobs data and concerns over supply disruption from Russia due to the conflict in Ukraine. However, crude futures shed 0.8 percent for the week.
The dollar index, which tracks the U.S. unit against six major currencies, traded at 79.49 on Monday, down from its previous close of 79.51 late Friday in North American trade. The dollar scaled a high of 79.53 intraday and a low of 79.43.
The euro traded lower against the dollar at $1.3877 on Monday, as compared to its previous close of $1.3884 late Friday in North America. The euro scaled a high of $1.3886 intraday and a low of $1.3866.
In economic news from the U.S., a report from the Institute for Supply Management showed the U.S. service sector expanded at a faster than expected rate in April, rising to 55.2, from 53.1 in March. Economists expected the index to increase to a reading of 54.2.
China's manufacturing sector contracted for the fourth successive month in April and the latest fall exceeded the preliminary estimate, survey data showed Monday. The HSBC Purchasing Managers' Index fell to 48.1 in April from 48 in March. The score was fractionally below the flash reading of 48.3. This is the fourth consecutive below-50 score, signaling contraction in the manufacturing sector.
Eurozone producer prices continued to decline in March albeit at a slightly slower pace, with concerns of deflation taking hold, data from Eurostat showed Monday. Industrial producer prices dropped 1.6 percent year-on-year, after a 1.7 percent fall in February, which was the biggest decrease since December 2009. Economists had forecast the pace of decline to remain unchanged.
Eurozone is experiencing a more lasting recovery and any risk of deflation remains very low, the European Commission said Monday. In its Spring 2014 forecast, the executive-arm of the EU projected 1.7 percent GDP growth for 2015, lower than the 1.8 percent predicted in February. The growth forecast for this year was retained at 1.2 percent.
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