A view of Saudi Aramco’s Ras Tanura refinery.

LONDON: Brent crude oil fell below $102 a barrel on Thursday, near a 14-month low, on plentiful fuel supplies and as Chinese economic data pointed to slowing demand, although prices steadied in early US trading.

US crude oil prices fell to the lowest since January below $93 a barrel before bouncing back toward $94 as a gauge of future US economic activity rose more than expected in July.

The world’s top two crude oil benchmarks have fallen by more than $10 a barrel since June on a build-up of supply in the Atlantic Basin and diminishing worries over the risk that conflicts in the Middle East would hit production.

Libya has resumed exports from its largest port, helping push its oil output to the highest level for months, while Saudi Arabia raised its output in July to 10 million barrels per day (bpd).

“Supply fears have been quelled by an increased export volume from Libya,” said Dorian Lucas, an analyst at energy consultancy Inenco.

Brent crude for October dropped as low as $101.21 a barrel on Thursday before recovering to trade down 35 cents at $101.93 by 1406 GMT. It touched $101.07 on Tuesday, its lowest since June 26, 2013.

US crude slipped to its lowest since January at $92.50 a barrel, down 95 cents, before reversing to trade 24 cents higher at $93.69.

Investors are more concerned about weak demand at a time when the supply outlook remains generally comfortable, despite world political worries, he said.

“There is no shortage of oil,” said Andrey Kryuchenkov, an oil strategist at Russian bank VTB Capital in London.

“Fighting in Iraq has had only a very limited impact on producing and transporting facilities. At the same time, lagging European demand and the seasonal lull in Asia continue to weigh on sentiment,” Kryuchenkov said.

A survey of China’s factory activity showed that growth in the sector slowed to a three-month low in August, adding to concerns about economic softness that could depress oil use in the world’s second-largest oil consumer.

“This is a figure which indicates that growth is likely to be reasonably moderate and any upside to current expectations about China will be possibly muted,” said Ric Spooner, chief analyst at CMC Markets.

“It will be generally a negative for commodities.”

The drop in Brent toward $100 has sparked talk that OPEC could consider cutting output, although delegates from the producer group have said higher seasonal demand in coming weeks is expected to support the market.

Prices would have to be lower over a sustained period before OPEC cuts output, Spooner said.

In the United States, a larger-than-expected drop in crude inventories last week buoyed West Texas Intermediate and helped the September contract gain $1.59 a barrel on its last day of trade.

 
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