Brent Oil Sinks To 16-Month Low On Demand Fears, Strong Dollar
NEW YORK, Sept 2 (Reuters) - Brent crude oil futures fell to the lowest level in 16 months on Tuesday, pressured by the prospect of slowing oil demand growth in China and Europe, while a strong dollar and ample supplies pushed U.S. prices to a seven-month low.
Oil prices on both sides of the Atlantic have been in steady decline since the end of June as concerns faded over supply disruptions from Iraq, Libya and Russia. Continued supply from key producing regions and tepid demand has left global markets well stocked.
Brent crude for October delivery fell $2.45 to settle at $100.34 a barrel, its lowest closing price since May 1, 2013. U.S. crude dropped $3.08 from Friday's close to settle at $92.88 a barrel, the lowest since Jan. 14. There was no trading in the United States on Monday because of the Labor Day holiday.
"There was some buying going into the long weekend and you are seeing that premium come out," said Oliver Sloup, director of managed futures at iitrader.com in Chicago. "The dollar is strong today and the U.S. has so much oil and has the capability to produce more."
Euro zone manufacturing growth slowed more than initially thought in August, data showed, while growth in China's factory sector slipped to a three-month low last month, adding to concerns about oil demand.
The euro sagged to fresh one-year lows against the dollar on bets the European Central Bank will do more to help a wobbly euro zone economy, while the pound fell to a near five-month low versus the greenback on worries about a Scottish secession.
Further pressure came from the prospect of resuming oil supplies from the Buzzard field in the North Sea. The Buzzard field, the biggest contributor to the Forties oil stream, one of the four crudes that underpin the price of Brent crude oil futures, may be shut for up to a week, after going offline at the weekend.
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