|
 Brent crude futures, the global benchmark, traded down 85 cents at
$48.71 a barrel at 1220 GMT, down 1.6 percent. U.S. futures were
trading at $45.84 a barrel, down 75 cents or 1.6 percent on Friday's
close.
"High OPEC production, record-high production in Russia and weak
China data are driving prices lower," said Carsten Fritsch, senior
oil analyst at Commerzbank in Frankfurt.
China's factory activity fell for an eighth straight month in
October, a survey showed, pointing at continued sluggishness in the
world's second-largest economy.
The global oil supply glut, which has more than halved oil prices
since a peak in June last year, was underscored on Monday when
Russia reported that its October oil production hit a post-Soviet
record of 10.78 million barrels per day.
The data reflected Russia's strategy of defending its market share
as rivals from the Gulf start supplying Moscow's traditional
markets.
Exports from OPEC-member Iraq on the other hand dropped sharply in
October due to weather-related shipment delays, the oil ministry
said on Sunday.
Last week, a Reuters survey showed sector analysts expected oil
prices to remain weak next year as OPEC will likely stick to its
stance of maintaining record-high production when it meets on Dec.
4.
OPEC member Iran is moving towards ramping up oil production and
exports to western consumers as it has begun decommissioning uranium
enrichment centrifuges under terms of a nuclear deal struck with six
world powers in July.
In Britain, the shutdown of the Buzzard oil field, the biggest
contributor to the Forties stream feeding into the Brent oil
benchmark, has been delayed to next year, an industry source said.
[to top of second column] |
In the United States, the oil rig count dropped to its lowest since
June 2010, data showed on Friday, adding to speculation that
domestic crude production will fall in the coming months,
potentially providing some respite for oil prices.
"It will still take a great deal of time to undermine the massive
surplus in crude oil inventories," said Martin King, analyst at
FirstEnergy Capital.
"As such, it is going to take a good deal of time for crude oil
prices to march steadily higher, but the foundations are now more
firmly in place."
Weak crude prices will likely continue to benefit oil companies'
refining businesses next year.
Swiss bank UBS said it expected solid refining margins for 2016 as
the refining supply and demand outlook remains fairly balanced for
the year ahead.
"We expect to see a more pronounced seasonality than usual with high
margins in 2Q and 3Q because of gasoline," UBS analysts said in a
research note.
(Additional reporting by Henning Gloystein in Singapore; editing by
Jason Neely)
[© 2015 Thomson Reuters. All rights
reserved.] Copyright 2015 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.
 |
