Oil drops as Chinese data disappoints, Iran talks take center stage

FILE PHOTO – A pump jack is seen surrounded by steam during sunset at a PetroChina oil field in Karamay, Xinjiang Uigur Autonomous Region January 5, 2011. REUTERS/Stringer

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  • July refinery output in China lowest since March 2020 – data
  • Saudi Aramco ready to maximize production to 12m bpd – CEO
  • U.S. Gulf of Mexico production resumes after repairs
  • Coming soon: Iran to respond to EU nuclear text on Monday

LONDON, Aug 15 (Reuters) – Oil prices fell more than $3 a barrel on Monday on demand concerns in China, the world’s biggest crude importer, and ahead of Iran’s response to a proposed nuclear deal that could increase the country’s oil exports.

Brent crude oil futures fell $3.49, or 3.56%, to $94.66 a barrel at 0945 GMT after falling 1.5% on Friday.

U.S. West Texas Intermediate crude fell $3.32, or 3.61% to $88.77, after falling 2.4% in the previous session.

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China’s economy slowed unexpectedly in July as refinery output fell to 12.53 million barrels per day, its lowest since March 2020, government data showed. Read more

ING Bank lowered its forecast for Chinese GDP growth in 2022 to 4%, from 4.4% previously. He warned that a further downgrade is possible, depending on the strength of exports which are suffering from high inflation, ongoing COVID-19 restrictions and growing unemployment in mainland China.

Oil supplies could increase if Iran and the United States accept an offer from the European Union to revive the 2015 nuclear deal, which would remove sanctions on Iranian oil exports, analysts said. Read more

Iranian Foreign Minister Hossein Amirabdollahian said on Monday that Iran would respond to the EU’s nuclear text later today and a deal could be reached if the United States agrees to the remaining three issues. Read more

“We will need more talks if Washington does not show flexibility to resolve the remaining issues… Like Washington, we have our own plan B if the talks fail,” Amirabdollahian said, according to the news agency. Iranian press Fars.

“The oil market may well have ranged between $105/bbl and $93/bbl Brent basis until the first real signs of a supply shortage emerge,” said oil broker PVM’s Tamas Varga.

Adding to the bearish sentiment, Saudi Aramco is ready to increase crude oil production to its maximum capacity of 12 million bpd if requested by the Saudi government, chief executive Amin Nasser told reporters on Sunday.

And a damaged pipeline component that disrupted production at several U.S. offshore platforms in the Gulf of Mexico was repaired Friday night, a Louisiana official said, as producers prepare to reactivate some production. interrupted. Read more

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Additional reporting by Florence Tan in Singapore; edited by Jason Neely

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