Investing.com - U.S. oil futures turned lower on Monday, after data showed that U.S. new home sales fell more-than-expected in December, dampening optimism over the economic outlook.
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On the New York Mercantile Exchange, West Texas Intermediate crude for delivery in March rose to a session high of USD97.17 a barrel, before turning lower to trade at USD96.45 during U.S. morning trade, down 0.2%.
WTI oil prices settled down 0.7% on Friday to end at USD96.64 a barrel, as investors fled risk amid growing fears over a slowdown in emerging market economies.
Nymex oil futures were likely to find support at USD95.12 a barrel, the low from January 22 and resistance at USD97.84 a barrel, the high from January 23.
The U.S. Commerce Department said new home sales dropped by 7% to a seasonally adjusted 414,000 units last month, compared to expectations for an increase to 457,000. New home sales in November were revised down to 445,000 units from a previously reported 464,000 units.
Oil prices were slightly higher earlier as markets stabilized following a broad based selloff in stocks and emerging market currencies on Friday.
The selloff in financial markets was triggered after data last week pointed to a steeper than expected slowdown in Chinese manufacturing, fuelling fears that weakness could spread to other emerging market economies.
The Asian nation is the world''s second largest oil consumer after the U.S. and has been the engine of strengthening demand.
Investors were looking ahead to the outcome of the Federal Reserve’s monthly meeting on Wednesday, amid expectations for a reduction in its bond buying program to USD65 billion from the current USD75 billion.
The policy meeting will mark the last for outgoing Fed Chairman Ben Bernanke, as current Vice Chair Janet Yellen prepares to take over.
In addition, the initial estimate of U.S. fourth quarter gross domestic product is reported on Thursday.
Data from the Commodities Futures Trading Commission released Friday showed that hedge funds and money managers increased their bullish bets in oil futures in the week ending January 21.
Net longs totaled 230,503 contracts as of last week, compared to 229,722 in the preceding week.
Elsewhere, on the ICE Futures Exchange in London, Brent oil futures for March delivery shed 0.6% to trade at USD107.25 a barrel, while the spread between the Brent and U.S. crude contracts stood at USD10.80 a barrel.
The spread between the two contracts narrowed as the Keystone XL pipeline linking Cushing, Oklahoma, to the U.S. Gulf Coast began making deliveries last week.
Flows will rise over the course of the year toward its 700,000-barrel capacity, which should help alleviate a glut of crude in the Midwest.