Oil down about 4 percent; gasoline drop adds to China, Iran worries

Mon Oct 19, 2015 4:04pm EDT
 
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By Barani Krishnan

NEW YORK (Reuters) - Crude oil fell about 4 percent on Monday after a tumble in gasoline futures added pressure to a market slumping on slower growth in China and signs that Iranian oil will return to the market soon following implementation of its nuclear deal.

A stronger dollar and softer equity markets on Wall Street added weight to the petroleum complex, traders said.

"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, a broker at New York's Liquidity Energy.

U.S. crude inventories rose by 3.7 million barrels last week, which would be the fourth consecutive weekly increase, according to average expectations of analysts polled by Reuters.

The poll showed draws for gasoline and distillate stockpiles as it predicted a half percentage point drop in refinery utilization from the previous week's 86 percent. Analysts said they expect refinery runs to pick up soon as autumn maintenance works end.

The front-month in Brent, the global crude benchmark, settled down $1.85, or 3.7 percent, at $48.61 a barrel.

U.S. crude's front-month settled down $1.37, or 3 percent, at $45.89, in lighter volume trades ahead of Tuesday's expiry for November CLX5 as the spot contract.

Gasoline RBc1 tumbled 5 percent on worries U.S. refinery utilization could pick up with declining maintenance work. Ultra-low sulfur diesel HOc1 fell nearly 3 percent.   Continued...

 
An offshore oil platform is seen at the Bouri Oil Field off the coast of Libya August 3, 2015.  REUTERS/Darrin Zammit Lupi