NEW YORK – Crude oil fell 3 percent on Monday as tumbling gasoline prices deepened a selloff sparked by China’s slowing growth and signs that a nuclear deal waiving sanctions on Iranian oil will be implemented this year.
A stronger dollar and weaker stock prices on Wall Street added to weight on the petroleum complex, traders said. [USD/] [.N]
“The products markets seem to be taking a hit over concerns the refinery maintenance season has peaked, and there could only be inventory builds from here,” said Pete Donovan, broker at New York’s Liquidity Energy.
The front-month in Brent <LCOc1>, the global crude benchmark, was down $1.55, or 3 percent, at $48.91 a barrel by 10:38 a.m. EDT.
U.S. crude <CLc1> was off $1, or 2 percent, at $46.26, in lighter volume trades ahead of Tuesday’s expiry for the November contract <CLX5> as front-month.
Gasoline <RBc1> tumbled 5 percent. The refining profit for the fuel, known as the gasoline crack <CL-RB1=R>, hit a 9-month low.
China’s economy grew at the slowest pace in six years in the third quarter, according to official data released on Monday, making it increasingly likely that Beijing will cut interest rates to spur activity.
Data also showed that Chinese oil demand fell slightly in September.
Iran’s nuclear negotiator said on Monday that he was hopeful for an implementation before year-end of the nuclear deal between Tehran and Western powers. A senior Iranian oil official also said the OPEC member will boost production by 500,000 barrels a day within one week of the sanctions being lifted.
The Buzzard oilfield in the North Sea, the largest contributor to the Forties crude stream that helps to set the global oil price, was, meanwhile, gradually ramping up production after a four-day outage.
(Additional reporting by Karolin Schaps in London and Keith Wallis in Singapore; Editing by David Clarke, David Goodman and W Simon)
This article was written by Barani Krishnan from Reuters and was legally licensed through the NewsCred publisher network.