Oil falls on bearish U.S. housing data, talk of rising Libyan output

Investing.com - Oil prices dropped on Monday after disappointing U.S. home sales figures sparked  concerns that the U.S. economy continues to battle potholes on its road to recovery and may demand less fuel and energy than once anticipated.

On the New York Mercantile Exchange, West Texas Intermediate crude for delivery in February traded at USD99.34 a barrel during U.S. trading, down 0.98%. New York-traded oil futures hit a session low of USD99.18 a barrel and USD100.43 a barrel.

The February contract settled at USD100.32 on Friday, up 0.77%.

Nymex oil futures were likely to find support at USD99.06 a barrel, the low from Dec. 26 and resistance at USD100.75 a barrel, the high from Dec. 27.

The National Association of Realtors reported earlier that its pending home sales index increased by a seasonally adjusted 0.2% in November, far shy of market expectations for a 1.0% gain. Pending home sales for October were revised to a 1.2% decline from a previously reported drop of 0.6%.

The news sent prices falling amid fears that the U.S. housing sector, which drove the country into the worst recession since the Great Depression and has dragged on its recovery ever since, continues to face headwinds today.

Elsewhere, reports that Libyan output is on the mend after facing shortages due to protesters disrupting production sent prices falling on expectations that global supply will rise.

Trading volumes were thin as many investors already closed books before the end of the year, reducing liquidity in the market and increasing volatility, which helped exaggerate market moves.

Elsewhere, on the ICE Futures Exchange in London, Brent oil futures for February delivery fell 0.99% to trade at USD111.07 a barrel, while the spread between the Brent and U.S. crude contracts stood at USD11.73 a barrel.