Oil prices are hardly relieved, worries about demand outstripping supply difficulties in Iran

Oil futures are down on Monday, under pressure from losses in the Chinese stock market, fueling concerns about a possible slowdown in energy demand, even as US sanctions on Iranian oil should tighten reserves world.

Investors wondered whether Saudi Arabia and its oil producing allies would be able to offset the expected global supply losses from Iran when these sanctions come into effect next week.

West Texas Intermediate gross for December delivery

CLZ8, -1.17%

on the New York Mercantile Exchange fell slightly by 32 cents, or 0.5%, to 67.27 dollars a barrel. The US benchmark registered a loss of about 2.4% for last week. December Brent

LCOZ8, -0.84%

the global benchmark dropped 42 cents, or 0.2 percent, to $ 77.20 a barrel. He lost 2.7% last week.

Oil prices recorded a third weekly drop last week, as strong losses on global stock markets weighed on demand prospects. US stock indexes rose Monday, but the Shanghai Composite Index

SHCOMP, -2.18%

dropped by more than 2%, with US-China trade relations continuing to shake investors' nerves.

Recent data showed that "industrial profits slowed for a fifth month" in China, said Craig Erlam, Senior Market Analyst at Oanda. "The impact of tariffs is gradually appearing in the data, which could reduce the population growth prospects for the country and weigh on demand expectations."

At the same time, in recent weeks, increasing production and exports between the Organization of the Petroleum Exporting Countries and non-OPEC countries, including the United States, have weighed supply-side market, while the vulnerability and concerns of the stock markets have increased. China's level of continuous consumption has remained unchanged on the demand side.

"Leveraged funds continued to exit long oil positions in the week to October 23," said Ole Hansen, Head of Commodity Strategy at Saxo Bank, citing data on traders' futures liabilities.

"A Saudi commitment to produce as much as possible and the rout of the stock markets have significantly reduced concerns about the implementation of US sanctions against Iran on November 4," he said.

The OPEC Joint Ministerial Follow-up Committee "has expressed concern over rising inventories over the last few weeks and highlighted the imminent macroeconomic uncertainties that may require a change of course," according to a press release published this week last. JMMC officials oversee the implementation of the crude production agreement that began on January 1, 2017 between members and non-members.

In addition, Reuters reported that Saudi energy minister Khalid al-Falih told state television channel al-Ekhbariya that "we (have) entered a phase of worry about this. [latest production] increase, "adding that intervention may be needed to restore stability.

The increase in US crude inventories has also been a pressure point, with crude inventories rising by 28.7 million barrels in the last five weeks, including the absorption of 3.5 million barrels of oil. the strategic oil reserve, said Jason Gammel, equity analyst at Jefferies, in a note on Friday. Although the increase in crude oil inventories partly reflects seasonal factors, US energy inventories fell slightly by 10 million barrels over the same period.

On Monday, November, Nymex's gas price was $ 1.825 a gallon, an increase of less than a penny, while the November fuel oil

HOX8, -1.05%

dropped 0.7% to $ 2.286 per gallon. November contracts for products expire at Wednesday's settlement.

November natural gas

NGX18, -1.32%

which ends at the day's settlement date, fell 1.7% to $ 3.13 per million British thermal units.

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