WTI near 4-month low after Brent falls below $50 on Iran

HEESU LEE

NEW YORK (Bloomberg) -- Oil in New York held near a four-month low after Brent crude slumped below $50/bbl for the first time since January on Monday as Iran pledged almost an immediate output increase after sanctions.

West Texas Intermediate futures were little changed after sliding 4.1% Monday. Iran can raise output by 500,000 bopd within a week of sanctions ending, said the state-run Islamic Republic News Agency. A Chinese private factory gauge released this week slipped to a two-year low in July, while an official index on Saturday dropped to a five-month low.

Oil slid into a bear market last month, joining a broader rout in commodities amid expanding supplies and signs of slower economic growth in China. The Asian nation in June regained its status from the U.S. as the world’s biggest crude importer. The slump may have further to go as U.S. refineries, which turned a record amount of crude into gasoline during July, typically slow from August through October for maintenance.

WTI for September delivery rose 20 cents to $45.37/bbl in electronic trading on the New York Mercantile Exchange as of 7:45 a.m. Singapore time. The contract dropped $1.95 to $45.17 on Monday, the lowest close since March 19. The volume of all futures traded was about 70% below the 100-day average. Prices have lost 15% this year.

Brent for September settlement slid $2.69, or 5.2%, to $49.52/bbl on the London-based ICE Futures Europe exchange on Monday, the lowest close since Jan. 29. The European benchmark crude ended the session at a premium of $4.35 to WTI.