Oil prices fell by more than 2 percent on Monday on concerns over the pace of economic growth in China, the world’s largest energy consumer, and indications that a nuclear deal between western powers and Iran could be implemented this year.
Brent for December delivery LCOc1 was down $1.35, or 2.7 percent, at $49.11 a barrel at 0920 ET. U.S. crude for November delivery CLc1 fell by $1.21, or 2.5 percent, to $46.05, extending last week’s steep losses.
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, meaning the country’s year-to-date growth is running behind the International Energy Agency’s forecast.
Saudi Arabia, the world’s biggest crude exporter, shipped 278,000 barrels a day less crude oil in August, trade data showed, suggesting demand for Saudi oil is sliding as the global supply glut persists.
“Chinese GDP data and the rise in the Saudi stockpile due to falling crude oil exports are weighing on prices,” said Tamas Varga, oil analyst at London brokerage PVM Oil Associates, noting that news the prospect of six world powers and Iran potentially implementing a nuclear deal this year was adding to the bearish picture.