Oil falls more than 3 percent on oversupply, China equity losses
By Lisa Barrington
LONDON (Reuters) - Oil fell more than 3 percent on Monday, hit by weaker Chinese equities and record North Sea crude production data that added to global oversupply concerns.
China's main indexes closed down on Monday as investors sold shares in the aftermath of a four-day market holiday, during which further restrictions on futures trading were announced.
"Oil is only taking its cues from China," SEB chief commodity analyst Bjarne Schieldrop said.
"The price is taking little notice of constructive data like stronger (European) equities, stronger base metals and last Friday's fall in U.S. rig count," he said.
Brent LCOc1 futures contracts for October fell $1.98 to settle at $47.76 a barrel, a 3.73 percent loss. U.S. crude CLc1 fell $1.80 to $44.25 per barrel by 2:48PM EST (1848 GMT), with trading volume of around 75,000 lots less than one-quarter the norm due to the U.S. Labor Day holiday.
Oil has fallen almost 60 percent since June 2014 on a global supply glut, with prices seesawing in recent weeks as concerns about a slowing Chinese economy caused turmoil in global stock markets.
"For commodities, the key demand-side figure to care about is not China’s GDP growing at 7 percent instead of 9 or 10 percent, it is the manufacturing price index, which has been falling for more than 40 months in a row," JBC Energy said.
The Organization of the Petroleum Exporting Countries is producing close to record volumes to squeeze out competition, especially from U.S. shale producers, which have so far weathered the price plunges to keep pumping oil. Continued...