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 China is Iran's largest trade partner and has bought roughly half
of its crude exports since 2012, when sanctions against the Islamic
Republic were tightened.
Oil markets were also pressured by a Goldman Sachs report saying
prices needed to remain low for months to slow U.S. oil output
growth.
Brent <LCOc1> was down 50 cents at $57.62 a barrel by 1100 GMT. U.S.
crude <CLc1> was down 60 cents at $51.54 a barrel.
Representatives of state-run National Iranian Oil Company will meet
China's biggest crude buyers including Unipec, the trading arm of
top Asian refiner Sinopec Corp <0386.HK>, and state trader Zhuhai
Zhenrong Corp, officials told Reuters.
Global oil markets already face a supply glut with producers pumping
over 1.5 million barrels per day (bpd) more than demand in the first
half of this year, analysts say.
"There is a massive oversupply, stocks are rising and now we have
the prospect of more Iranian oil coming onto the market," said
Carsten Fritsch, analyst at Commerzbank in Frankfurt.
Goldman said in a research note it expected U.S. crude inventories
to top out in April and subsequently draw down at 350,000 bpd during
May-September, when demand for fuel to power cars and
air-conditioners is at its greatest.
Still, the bank said it saw little upside for its $40-a-barrel
forecast over the next three months, anticipating inventories would
rise again by October, pressuring prices into 2016.
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"Prices need to remain low in coming months to achieve a sufficient
and sustainable slowdown in U.S. production growth," the bank said,
adding that the U.S. outlook for 2016 made its forecast for
$65-a-barrel oil next year look too high.
On Monday, energy information group Genscape said its data showed
stocks at the Cushing, Oklahoma oil hub rose by 169,000 barrels in
the week to April 3.
The American Petroleum Institute will release weekly oil inventories
data on Tuesday at 4:30 p.m. EDT (2030 GMT), while the Energy
Information Administration will publish its data on Wednesday at
10:30 a.m. EDT.
U.S. commercial stocks were seen extending their record build for
the 13th consecutive week, a Reuters survey showed. [EIA/S]
(Additional reporting by Henning Gloystein and Florence Tan in
Singapore; Editing by Ruth Pitchford; Editing by Dale Hudson/Ruth
Pitchford)
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