Oil eases towards $115

Worries of a worsening economic outlook in the world’s second-biggest oil consumer, China, on top of a prolonged crisis in Europe, are also pressuring oil prices.

Front-month Brent crude, due to expire later on Tuesday, slipped 50 cents $115.30 by 1030 GMT. US oil eased 5 cents to $91.80.

“Once again, it is apparent that the oil market is currently being driven by speculation and too much ‘hot money’,” said a Commerzbank research note.

Brent was also supported by a possible delay in the restart of Britain’s largest oilfield, Buzzard, after maintenance, further hurting shipments of oil that sets the benchmark.

That helped the contract’s premium to US oil rise in earlier trade to $24 - the widest spread in a year.

Prices are meanwhile under pressure from expectations that US crude stocks rose last week due to an anticipated increase in imports, while weak demand may lift gasoline stockpiles, a preliminary Reuters poll showed on Monday.

Adding to overall supplies, Saudi Arabia pumped around 9.8 million barrels a day (bpd) of crude oil in September, an industry source said.

According to official Saudi government figures supplied to OPEC, the world’s biggest oil exporter produced 9.75 million bpd in August and 9.8 million bpd of crude in July.

“Fundamentally there is no shortage of oil, with Saudi Arabia and others maintaining high output while inventory levels are also good,” said Ken Hasegawa, a commodity sales manager with Newedge in Tokyo.

The European Union cranked up pressure to force Teheran to halt its disputed nuclear programme with further sanctions on Iran’s oil, gas and banking sectors.

The measures came days after the Islamic Republic said it would negotiate on halting higher-grade uranium enrichment if given fuel for a research reactor.

The new sanctions, one of the EU’s toughest moves against Iran to date, reflect mounting concern over the nuclear programme and Israeli threats to attack Iranian atomic installations if a mix of sanctions and diplomacy fails.

Iran maintains that its nuclear project has only peaceful energy purposes and has refused in three rounds of talks since April to scale back uranium enrichment unless major economic sanctions are rescinded.