By Biman Mukherji
HONG KONG--Oil prices are trading near four-month lows on
Tuesday as a plunge in Chinese equities battered investment
sentiment.
The sell off in equities market is being seen as a symptom of a
wider economic malaise affecting China, which could depress demand
from one of the largest consumers of crude oil.
"We are seeing such a big drop in stocks in a major economy and
that has weakened the sentiment," said Daniel Ang, investment
analyst with Phillip Futures.
The concerns also come in the wake of a rise in weekly numbers
for U.S oil drilling rigs which could add to a supply overhang.
The bearish sentiment in oil has increased over the past few
days as Iran's output is expected to add to a stream of oil
supplies for which there are fewer takers.
Nymex oil futures for the near-month September contract slipped
below $47 per barrel, but is now at $47.15 per barrel, down 24
cents from the previous settlement. It earlier hit a low of $46.92
during the day, its lowest since mid-March.
Brent crude, the global oil benchmark, was down 32 cents at
$53.15 a barrel on London's ICE Futures exchange.
For some producers lower oil prices means an intensifying market
share war, an ANZ report said.
It added that Iraq's oil exports from the south climbed to a
record 3 million barrel per day, a 10% increase month-on-month.
At the same time the self-ruled Kurds in the north are also
shipping crude independently, adding to the global supply.
Nymex reformulated gasoline blendstock for August--the benchmark
gasoline contract--fell 0.6% to $1.8095 a gallon.
Write to Biman Mukherji at biman.mukherji@dowjones.com