Oil extends losses on global slowdown and chance of more supply

Oil fell for a third day as a deepening global slowdown looked set to coincide with an increase in supply from OPEC producers.

West Texas Intermediate futures slid toward $88 a barrel after dropping around 5 per cent over the previous two sessions. Mounting signs of an economic downturn filtered through markets on Monday as bearish US data including rapidly cooling manufacturing followed weaker-than-expected Chinese numbers.

Investors are also facing the prospect of rising supply as demand moderates, with Libya pumping more and Iran edging closer to reviving a nuclear deal that will likely see higher crude flows.

Prompt time spreads are also signaling concerns over tight global markets are easing.

Iran sent the European Union its official response to the bloc’s proposal for reviving the 2015 nuclear accord after signaling it may be nearer a deal with the US.

Foreign Minister Hossein Amirabdollahian said an agreement can be reached with Washington to restore the beleaguered accord in the next few days “if the US shows a realistic approach and flexibility.”