ICE October Brent futures settled 46 cents lower at $96.65/barrel, a front-month close not seen since June 2012, as weaker-than-expected Chinese economic data stoked concerns about the global economy and sluggish oil demand growth.
NYMEX October crude futures closed 65 cents higher at $92.92/b. In refined products action, NYMEX October ULSD was essentially flat, up 9 points at $2.7396/gal, while NYMEX October RBOB settled 1.20 cents higher at $2.5308/gal.
It was the second trading session in a row that the front-month ICE Brent futures contract settled at a multi-year low. On Friday, ICE October Brent set its own record-low close since June 2012.
The last time front-month ICE Brent settled lower than Monday's close was on June 28, 2012, when it closed at $91.36/b.
News of slowing Chinese industrial production pushed down prices even further Monday, with an intraday low of $96.10/b posted.
Chinese manufacturing grew 6.5% in August, the lowest rate since December 2008, China's National Bureau of Statistics said Saturday. The August figure was below analysts' expectations of 8.8% growth, and July's 9% growth.
"Data is confirming that the US economy is doing better than the rest of the world right now," Phil Flynn, an analyst at Price Futures Group, said.
"The news out of China shows industrial data is worse than expected, plus you have Russian sanctions weighing on prices," he said, referring to the recent round of economic penalties imposed on Moscow for its role in the Ukraine crisis.
An unintended consequence of Russian sanctions could be to weaken the European economy, given the close business ties between the two sides, lowering oil demand in the process, analysts say.
Such a possibility only adds to the drumbeat of bearish news surrounding the European Union's economic outlook.
On Monday, the Organisation for Economic Cooperation and Development cut its projected euro zone growth forecast for 2014 and 2015. The euro zone economy is expected to grow 0.8% in 2014 and 1.1% in 2015, down from the OECD's forecast in May of 1.2% and 1.7%, respectively.
In the US, meanwhile, the Empire State manufacturing survey was 27.5 in September, the New York Federal Reserve said Monday, its highest level since October 2009.
Front-month ICE Brent has been on a decline since the summer, driven lower by ample supplies in the Atlantic basin and macro-economic data, especially in Europe and China, pointing in the direction of falling oil demand growth.
Political instability and fighting in the Middle East, North Africa and Ukraine loom as potentially bullish factors, but have yet to result in any supply disruptions, analysts say.
Crude production in Libya has been on the rise since August after rebels ended a year-long occupation of eastern ports -- Es Sider and Ras Lanuf -- allowing exports to resume.
Output has increased to 840,000 b/d, a spokesman for state-owned National Oil Corp. said Monday. Libya's oil production had sunk to 150,000 b/d.
Should threats emerge to Libyan or Iraqi crude production, oil prices could strengthen as investors rebuild some of the length they have shed the last few months, BNP Paribas analysts said in a client note Monday.
Money managers have cut their net ICE crude long futures position by two-thirds since its peak at the end of June from 14.8% to 5% of total open interest, they said.
"While recognizing the risk of attempting to 'catch a falling knife,' we nonetheless think Brent's chances to touch $110/b are higher than to sink to $90/b," the bank analysts said.
