Crude Retreats On Monday

Crude oil fell below the $97.50 level on Monday, in a correctional move after Friday’s gains when it capped the longest streak of weekly gains in more than eight years, however signs of economic recovery in the U.S. and China and the tensions in the Middle East may keep losses limited.

Crude is trading as of this writing around the $97.45 a barrel level compared with the opening at $97.69 and with the highest at $97.72 and the lowest at $97.43. On the short term crude finds support at $96.80 then at $96.30 and resistance at $98.00 then at $98.30.

Sentiment was lifted on Friday by signs of economic recovery in the world’s two biggest crude consumers . China’s services industries grew in January at the fastest pace since August last month, while the U.S. added 157,000 jobs in January.

Also supporting the oil market was the dollar’s weakness . The U.S. dollar traded near the lowest level since November 2011 versus the euro, increasing the investment appeal of commodities priced in the U.S. currency like the oil.

"There’s been an unbroken sequence of decent economic news in recent times and China services PMI and the employment figures were no exception. That, together with some weakness in the U.S. dollar, is generally helping to support the oil market," said Ric Spooner from CMC Markets in Sydney.

While the brighter global economic recovery improve the outlook for oil demand, the tensions in the Middle East, the world`s biggest source of crude, are also keeping prices heading north. 33 people were killed in Iraq on Sunday in the third major attack in weeks.

Meanwhile, Iran said it was open to a U.S. offer of direct talks on its nuclear program, while Syria’s president Bashar al-Assad accused Israel on Sunday of trying to destabilize Syria, following the attack on a military research base outside Damascus last week.

Brent is trading as of this writing around the $116.51 after falling 0.21%; natural gas is trading at $3.311 per 1,000 cubic feet after rising 0.30%; gasoline is trading at $3.0431 a gallon after falling 0.34%; heating oil is trading at 3.1569 after falling 0.12%.

Markets are eyeing later this day eurozone’s producer price index and Sentix investor confidence, as well as UK’s PMI construction and the U.S.’s factory orders for the month of December.