The world’s biggest energy consumer, China, faces significant downward pressure on its economy, its premier Li Keqiang was quoted by state radio as saying on Monday.
China is expected this week to report growth slowing to 7.2 percent from a year ago, the weakest since the depths of the last global economic crisis. Data from China’s National Bureau of Statistics showed on Sunday house prices fell for a fourth straight month.
Brent crude traded at $49.15 a barrel by 1646 GMT, down $1.02, having earlier dropped to a session low of $48.88. U.S. crude was down $1.02 at $47.67 a barrel.
Oil prices have dropped by more than half since June as output around the world soared while demand growth slowed. Although the International Energy Agency (IEA) said last week a reversal in the trend was possible this year, it added that prices may fall further before rising.
“There’s still more supply than demand and that’s a situation that will not change in just a few weeks,” said Hans van Cleef, energy economist at ABN Amro.
Iraq pumped a record 4 million barrels per day (bpd) of oil in December, Oil Minister Adel Abdel Mehdi said on Sunday, as output rose from its southern terminals and supply from the north surged.
Iran’s oil minister Bijan Zanganeh said on Monday consultations with other Organization of the Petroleum Exporting Countries members to stop oil prices falling had yet to bear fruit, but Tehran had no plans to call an emergency OPEC meeting to discuss prices.
“Even if the oil price goes down to $25 a barrel, the oil industry will not be threatened,” the Fars news agency quoted Zanganeh as saying.
Prices found some support from a drop in U.S. drilling rigs, signifying a likely fall in future production. In a note to clients, Commerzbank analysts said latest figures from oilfield services company Baker Hughes showed the rig count hit its lowest level since October 2013.
“Shale oil production is likely to follow suit after a certain delay. This does nothing to change the considerable oversupply in the short term, however,” Commerzbank said.