* China Sept HSBC PMI hits 6-month high
* Iraq resumes normal output from southern oilfields
* Libya's eastern Hariga port could reopen this week
(Updates prices to settlement)
By Anna Louie Sussman
NEW YORK, Sept 23 Oil prices on both sides of
the Atlantic shed more than $1 per barrel on Monday despite
upbeat economic data from China and Europe, as higher crude
output from Iraq and a possible thaw in U.S.-Iran relations
boosted the supply outlook.
Oil prices plummeted last week as Libya's production
recovered to nearly 40 percent of pre-war capacity after
protesters agreed to reopen major western fields, and as fears
of U.S.-led military action against Syria faded.
Brent crude oil has shed around $8 from its September high
above $116 at the beginning of the month.
Libya's eastern Hariga port could reopen this week but
negotiations were continuing in hopes of ending a dispute that
has shut larger eastern terminals for weeks, the head of the
energy committee in parliament said.
"There's been a lot of progress in Libya and that's
outweighing some of the positive data from China and Europe,"
said Joseph Basilico, senior vice president of energy
derivatives at Jefferies Bache in New York.
Brent crude for November delivery fell $1.06 to
settle at $108.16 per barrel, after reaching a session low of
$107.76. U.S. crude for November fell $1.16 to $103.59 a
Brent's premium over U.S. crude stood at $4.57, little
changed from Friday's close of $4.55.
U.S. RBOB gasoline futures led the complex lower,
shedding 2 percent of its contract value. The contract fell by 6
cents to close at $2.62 per gallon.
"Summer driving season has come to a close and U.S. gasoline
production is at historically high levels for this time of
year," said Phil Flynn, an analyst with the Price Futures Group
in Chicago, Illinois.
Iraq, a key OPEC producer, said it boosted output from its
southern oilfields after repairing a leaking pipeline.
More oil is also coming from South Sudan as it raised output
to the highest level since it resumed exports through Sudan.
"The return to the market of Libyan and South Sudanese
supply is weighing on prices. South Sudan is currently producing
240,000 barrels of crude oil per day, the highest volume since
oil production was shut down in January 2012," Commerzbank
senior oil analyst Carsten Fritsch said.
The bearish mood for oil also drew support from the
possibility of a groundbreaking meeting between leaders of the
United States and Iran on the sidelines of the United Nations
gathering this week.
Iranian President Hassan Rouhani is aiming to set the tone
for further nuclear talks with world powers which he hopes will
bring relief from sanctions, according to diplomats and
Iranian Foreign Minister Mohammad Javad Zarif agreed to new
talks on its nuclear program with six world powers including the
United States during this week's gathering of world leaders in
New York. U.S. Secretary of State John Kerry welcomed the
Exports from Iran, one of the largest crude producers, have
more than halved in recent years to around 1 million barrels per
day in 2012 due to tightening sanctions.
China's flash HSBC Purchasing Managers' Index (PMI) hit a
six-month high, putting to rest investors' worries of a sharp
slowdown in the world's second largest economy.
In the euro zone, China's largest business partner, the
Markit Flash Composite PMI showed business activity has grown
faster than expected this month as new orders flood in at their
fastest pace in over two years.
U.S. manufacturing activity growth slowed in September as
demand for products declined and firms took on fewer workers, an
industry report showed, said financial data firm Markit.
(Additional reporting by Ron Bousso in London, Florence Tan in
Singapore; Editing by David Gregorio and Marguerita Choy)