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Brent crude oil futures <LCOc1> were down 34 cents at $77.28 a
barrel at 1005 GMT, while U.S. crude futures <CLc1> fell by 30
cents to $67.29.
Even with U.S. sanctions on Iranian exports due to come into
force in under a week, oil has lost nearly 7 percent in value
this month, the largest percentage decline since July 2016.
Industrial commodities such as crude and copper have been
rattled by hefty losses in global equities due to concern over
corporate earnings, fears over economic growth amid escalating
trade tensions, and a stronger dollar.
"It is often said that when stock markets sneeze, commodities
catch a cold. This adage was on full display last week as a
global rout on equity gauges dragged the energy complex lower,"
PVM Oil Associates strategist Stephen Brennock said.
"Adding a further tailwind to the prevailing selling pressures
are mounting concerns of a budding oversupply. Saudi Arabia and
Russia are leading efforts to keep oil markets well supplied at
the same time as the demand outlook darkens ... The Iranian
factor has been put on the back burner and bullish blood will
continue to be spilled in the oil market."
Fund managers have cut their bullish positions in crude futures
and options for four weeks in a row to their lowest since July
2017, as the demand outlook grows more uncertain.
Data from the InterContinental Exchange and the U.S. Commodity
Futures Trading Commission shows combined bullish holdings of
Brent and U.S. crude futures and options have fallen by a third
in four weeks, to around 572 million barrels.
This position was equivalent to nearly 1.2 billion barrels in
January.
"The market is likely to focus its attention more on fundamental
data again, especially with respect to possible supply
bottlenecks in the coming months given that strict U.S.
sanctions on Iranian oil exports will come back into force from
next week," Commerzbank analysts wrote.
On the supply side, Iran has started selling crude to private
companies via a domestic exchange for the first time, the Oil
Ministry's news website reported.
With just days to go before renewed sanctions take effect, three
of Iran’s top five customers – India, China and Turkey - are
resisting Washington’s call to end purchases outright, arguing
there are not sufficient supplies worldwide to replace them,
sources familiar with the matter said.
(Additional reporting by Henning Gloystein in SINGAPORE; Editing
by Dale Hudson)
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