Oil down 1 percent; U.S. crude near six-and-a-half-year low on Japan, China
By Barani Krishnan
NEW YORK (Reuters) - Oil fell about 1 percent on Monday, with U.S. crude settling within range of a new 6-1/2-year low, after No. 3 oil consumer Japan said its economy contracted in the second quarter and China's slowdown continued to weigh on sentiment.
A stronger dollar .DXY, after a report that U.S. industrial output grew at the fastest pace in eight months, also made greenback-denominated commodities, including crude, less affordable for holders of the euro and other currencies. [USD/]
U.S. light crude CLc1 settled down 63 cents, or 1.5 percent, at $41.87 a barrel. Monday's intraday low of $41.64 came within striking distance of Friday's low of $41.35, the weakest front-month price since March 2009. Trading in expiring options for U.S. crude dominated the action.
Brent LCOc1, the global crude benchmark, settled down 45 cents, or nearly 1 percent, at $48.74 a barrel. It earlier hit a session low of $48.35, about $3 above its six-year low of $45.19 set in January.
Japan's economy shrank at an annualized pace of 1.6 percent in the second quarter. China fixed its exchange rate slightly higher for the second day running, after a surprise devaluation last week sliced 3 percent off the yuan.
"The general talk in the market is about the continued ripple effect from the Chinese devaluation," said David Thompson at Washington-based energy-specialized commodities broker Powerhouse.
Oil has lost about a third of its value since June.
U.S. crude itself has fallen for seven weeks in a row, after another rise last week in U.S. oil rig additions that hinted at growing production. Continued...