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Last Updated : Aug 24, 2015 06:25 PM IST | Source: Reuters

Brent, US oil mark fresh 6-1/2-yr lows on China, oversupply

Other commodities also hit fresh lows in early Asian trading as fears spread that a more severe slowdown in China would pull down other economies in the region, denting energy and raw material consumption.


Brent and US crude oil futures hit fresh 6-1/2-year lows on Monday as investors fretted that a slowing Chinese economy will lead to weaker demand amid a global supply surplus.


Other commodities also hit fresh lows in early Asian trading as fears spread that a more severe slowdown in China would pull down other economies in the region, denting energy and raw material consumption.


Brent oil LCOc1 was trading down 94 cents at an intraday low of USD 44.52 a barrel as of 0251 GMT, its lowest since March 2009.

On Friday it ended USD 1.16, or 2.5 percent, lower at USD 45.46 a barrel.

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US October crude CLc1 fell USD 1.07 to an intraday low of USD 39.38 a barrel, also it lowest since march 2009.

In the previous session it settled 87 cents, or 2.1 percent, lower at USD 40.45 a barrel.


"Supply-side news continues to dominate the market ... Fears of surging Iranian oil are likely to increase further after Iran's oil minister stated the country had plans to raise oil production at any cost," ANZ said in a note on Monday.


Iran's Oil Minister Bijan Zanganeh said on Sunday that holding an emergency OPEC meeting may be "effective" in stabilizing the oil price, Iran's oil ministry news agency Shana reported.

There was a similar call by Algeria earlier this month, but other OPEC delegates said no meeting was planned.


Asian stocks also fell on Monday after Wall Street suffered another bruising blow as deepening concerns over the slowing Chinese economy continued to unnerve global equity markets.


The safe-haven yen rallied and key government bonds were bought from the widespread unrest in the financial markets.


"Heading into September, deep uncertainties surround the global oil markets, including the strength of China's crude demand, the resilience of US shale producers and the depth and pace of the seasonal downswing in global refinery throughput," said BMI Research, part of the Fitch ratings agency.


China's major stock indexes have collapsed, with traders saying market disappointment over the lack of a liquidity move by the central bank during the weekend triggered a fresh selloff.


US energy firms added two oil rigs last week, the fifth increase in a row, signaling further pressure on a market awash with crude.



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First Published on Aug 24, 2015 08:42 am
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