Oil Falls More Than 3% on Oversupply, China Equity Losses
London: 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.
The U.S. Labor Day holiday helped keep trade thin.
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 crude for October was down $1.60 at $48.01 a barrel by 1545 GMT, having reached an intraday low of $47.70. U.S. crude for October was down $1.45 at $44.60, having reached an intraday low of $44.30.
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.
"The focus is shifting back to the still-high oversupply," Commerzbank senior oil analyst Carsten Fritsch said.
In the short term, supply will swell further from the North Sea, where crude output tracked by Reuters will rise to its highest in just over two years in October, according to loading schedules, adding to ample Atlantic Basin supplies.
Despite this production spike, the year-long decline in oil prices has caused more than 5,000 job losses in Britain's North Sea oil and gas sector since late last year, the country's Oil and Gas Authority said on Monday.
The dollar has strengthened since late August, also denting oil prices by making the commodity more expensive for holders of other currencies.
Investors are awaiting euro zone second-quarter gross domestic product figures on Tuesday, followed by monthly global oil supply and demand data from U.S. and global energy authorities to give oil further direction.
