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CORRECTED-UPDATE 8-U.S. crude edges lower in light trading on weak economic data
August 25, 2014 / 12:30 PM / 3 years ago

CORRECTED-UPDATE 8-U.S. crude edges lower in light trading on weak economic data

(Corrects U.S. crude settlement price to $93.35 from $93.26, paragraph 4)

* U.S. new home sales, services activity fall

* Fed to lay groundwork for interest rate rise

* Putin to meet Ukraine’s Poroshenko on Tuesday

* Brent net longs hit new low on ample supply

By Anna Louie Sussman

NEW YORK, Aug 25 (Reuters) - Brent crude oil edged higher on Monday while U.S. crude fell in light trading, as support from geopolitical tensions in Ukraine and Libya offset ample supplies and anticipated weak demand after a slew of disappointing economic data from the United States and Europe.

“Liquidity is down because of the holiday in London and the usual August vacation time, And while the market continues to see increasing geopolitical risk in Libya and the Russia, Ukraine situation, traders are more focused so far on concerns about slowing demand with the weak data from Europe and the United States,” said Phil Flynn, analyst at Price Futures Group in Chicago, referring to a fall in new home sales and cooling services sector activity in the United States, and weak business sentiment in Germany.

London financial markets were closed on Monday due to a national bank holiday.

Brent crude rose 36 cents to settle at $102.65 a barrel. It hit a 14-month low of $101.07 on Aug. 19. U.S. crude fell by 30 cents to settle at $93.35 a barrel.

“The market’s range-bound; it’s consolidating and finding support against previous lows,” said Bill Baruch, senior market strategist at in Chicago.

Brent crude has traded largely within a $101 to $106 range in August, and U.S. crude has mostly remained between $93 and $99.

CME Group delayed the start of trade on its electronic platform by four hours on Monday because of technical problems, the latest glitch to hit the world’s largest futures market operator, but traders in the United States and Asia said it had limited impact.

Underlining the extent of the recent selling pressure, exchange data on Monday showed hedge funds and other big speculators, in the week to Aug. 19, cut their bets on rising Brent prices to the lowest in more than two years.

A further recovery in Libyan output, last reported to be 612,000 barrels per day (bpd), looks uncertain, analysts said. Rockets hit an airport in eastern Libya on Monday, a day after fire destroyed the terminal at Tripoli’s main airport.

The Libyan parliament that was replaced in an election in June reconvened on Monday and chose an Islamist-backed deputy as prime minister, leaving the chaotic country with two rival leaders and assemblies each backed by armed factions.

In Europe, Russian President Vladimir Putin will meet his Ukrainian counterpart Petro Poroshenko for the first time in months on Tuesday to try to reach a compromise on Ukraine.

Russia wants to send a second humanitarian aid convoy to eastern Ukraine in the near future, Foreign Minister Sergei Lavrov said on Monday after Kiev and the West criticised Moscow for sending the first convoy without official permission.

The dollar index rose as the U.S. Federal Reserve prepared to lay the groundwork for the central bank’s first interest rate increase in nearly a decade.

A stronger dollar makes dollar-denominated commodities such as oil more expensive for holders of other currencies and tends to weigh on prices. (Additional reporting by Robert Gibbons in New York, Alex Lawler in London, Florence Tan in Singapore; Editing by Dale Hudson, David Goodman, Gunna Dickson and Chris Reese)

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