Brent trades near 13-month low amid supply surplus

Brent crude traded near its lowest intraday level in 13 months on speculation that supplies are excessive as Libyan output recovers and economic activity in China slows. West Texas Intermediate was steady.

Futures slipped as much as 0.6 percent in London in a fourth daily decline. Libya exported the first oil cargo from Ras Lanuf port since it was closed by rebels a year ago. China’s broadest measure of new credit plunged to the lowest since the global financial crisis, while the National Bureau of Statistics in Beijing said growth in factory production slowed. The IEA said a supply glut was shielding the market against threats to output in the Middle East.

“On the supply side, there’s been positive news from Libya even as the fighting worsens, giving a better situation in the physical market,” said Frank Klumpp, an analyst at Landesbank Baden-Wuerttemberg in Stuttgart, Germany.

“The demand side has potential for a bearish surprise as we have growing uncertainty” over China’s economy, he said.

Brent for September settlement declined as much as 65 cents to $102.37 a barrel on the London-based ICE Futures Europe exchange, the lowest since July 1, 2013. It traded for $102.91 at 12:16pm London time, when the volume of all futures traded was about 46 percent above the 100-day average. The European benchmark crude was at a premium of $5.69 a barrel to WTI on ICE, after closing at $5.65.

WTI for September delivery was 15 cents lower at $97.22 a barrel in electronic trading on the New York Mercantile Exchange, having earlier dropped as much as 31 cents to $97.06 a barrel. The contract fell 0.7 percent to $97.37 a barrel, the lowest close since August 7.

Aggregate financing in China was 273.1 billion yuan ($44bn) in July, the central bank said in Beijing. Factory production rose 9 percent from a year earlier in July, compared with 9.2 percent in June, figures from the statistics bureau showed.

WTI was little changed before weekly supply and demand data from the Energy Information Administration, the statistical unit of the Energy Department.