 "Brent crude oil tumbles below $50 on Iran supply plans")
Brent crude oil dropped below $50 a barrel for the first time since January as Iran vowed to boost production immediately after sanctions are lifted and manufacturing in China slowed.
Futures in London extended July's 18 per cent drop. Iran can raise output by 500,000 barrels a day within a week of sanctions ending, the state-run Islamic Republic News Agency reported. A Chinese private factory gauge released on Monday slipped to a two-year low in July, while an official index on Saturday dropped to a five-month low.
Crude slid into a bear market last month, joining a broader slide in commodities amid expanding supplies and signs of slower Chinese growth. Iran's nuclear deal with world powers fuelled speculation about when and by how much it will lift output. Sanctions against the nation should be lifted by late November, the Iranian Oil Ministry's Shana news agency said.
Brent for September settlement dropped $2.31, or 4.4 per cent, to $49.90 a barrel on the London-based ICE Futures Europe exchange, at 12:11 pm in New York. The contract touched $49.88, the lowest level since January 30. Prices are more than 20 per cent below this year's high on May 6, meeting a common definition of a bear market.
Bottom seeking
West Texas Intermediate (WTI) for September delivery fell $1.54, or 3.3 per cent, to $45.58 a barrel on the New York Mercantile Exchange.
"The market is looking for a bottom," Gene McGillian, a senior analyst at Tradition Energy in Stamford, Connecticut, said by phone. "I doubt we'll break through the six-year lows we hit earlier this year, but will probably end up pretty close to the lows."
Iran plans to double exports, IRNA reported, citing Oil Minister Bijan Namdar Zanganeh in an interview with state TV.
The Islamic Republic produced an average of 2.85 million barrels a day last month, compared with 3.6 million at the end of 2011, according to estimates compiled by Bloomberg.
Chinese manufacturing
A China factory index for July released Monday by Caixin Media and Markit Economics came in at 47.8, a decline from 49.4 in June, indicating the effects of easier monetary policy have yet to kick in. The country's official Purchasing Managers' Index was 50 in July, down from 50.2 in the previous month. Numbers above 50 indicate expansion.
Hedge funds reduced bullish bets on WTI to the lowest level in five years. The net-long position in WTI contracted seven per cent in the week ended July 28, US Commodity Futures Trading Commission data show.
Money managers cut their bullish stance on Brent during the same period by 37,527 contracts, the most in a year, according to data on Monday from ICE.
Futures in London extended July's 18 per cent drop. Iran can raise output by 500,000 barrels a day within a week of sanctions ending, the state-run Islamic Republic News Agency reported. A Chinese private factory gauge released on Monday slipped to a two-year low in July, while an official index on Saturday dropped to a five-month low.
Crude slid into a bear market last month, joining a broader slide in commodities amid expanding supplies and signs of slower Chinese growth. Iran's nuclear deal with world powers fuelled speculation about when and by how much it will lift output. Sanctions against the nation should be lifted by late November, the Iranian Oil Ministry's Shana news agency said.
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"Iranian claims that they can ramp up production by 500,000 barrels within a day of the lifting of sanctions look credible to me and has the market moving lower," John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund, said by phone. "The Chinese data continues to look grim, which with the Iran headlines makes for a one-two punch for the oil market."
Brent for September settlement dropped $2.31, or 4.4 per cent, to $49.90 a barrel on the London-based ICE Futures Europe exchange, at 12:11 pm in New York. The contract touched $49.88, the lowest level since January 30. Prices are more than 20 per cent below this year's high on May 6, meeting a common definition of a bear market.
Bottom seeking
West Texas Intermediate (WTI) for September delivery fell $1.54, or 3.3 per cent, to $45.58 a barrel on the New York Mercantile Exchange.
"The market is looking for a bottom," Gene McGillian, a senior analyst at Tradition Energy in Stamford, Connecticut, said by phone. "I doubt we'll break through the six-year lows we hit earlier this year, but will probably end up pretty close to the lows."
Iran plans to double exports, IRNA reported, citing Oil Minister Bijan Namdar Zanganeh in an interview with state TV.
The Islamic Republic produced an average of 2.85 million barrels a day last month, compared with 3.6 million at the end of 2011, according to estimates compiled by Bloomberg.
Chinese manufacturing
A China factory index for July released Monday by Caixin Media and Markit Economics came in at 47.8, a decline from 49.4 in June, indicating the effects of easier monetary policy have yet to kick in. The country's official Purchasing Managers' Index was 50 in July, down from 50.2 in the previous month. Numbers above 50 indicate expansion.
Hedge funds reduced bullish bets on WTI to the lowest level in five years. The net-long position in WTI contracted seven per cent in the week ended July 28, US Commodity Futures Trading Commission data show.
Money managers cut their bullish stance on Brent during the same period by 37,527 contracts, the most in a year, according to data on Monday from ICE.