NEW YORK (Reuters) - Crude oil fell more than 3 percent on Monday, dragged down by a tumble in gasoline and apprehension about whether the United States will have its first interest rate hike in nearly a decade.
Gasoline, which rallied sharply in the second quarter to pull crude higher, slumped 4 percent. Traders cited weakness in nearby contracts of RBOB gasoline versus farther-dated ones on NYMEX RBc1-RBc2 as the peak U.S. summer driving season wound to a close.
“I think this is surprising to many and catching them off guard as the trend of strong spreads in RBOB are over now,” said Scott Shelton, commodities specialist at ICAP in Durham, North Carolina.
U.S. crude CLc1 was down 75 cents at $43.88 a barrel by 12:36 p.m. EDT (1636 GMT) after declining to as low as $43.59.
Brent LCOc1, the global benchmark for crude, was off $1.58 at $46.56, versus a session low at $46.36.
Oil traders are waiting to see if the Federal Reserve will raise U.S. interest rates Thursday for the first time since the financial crisis. Should the rate hike occur, analysts expect oil to fall, as a stronger dollar would undermine demand from importing countries.
Crude futures briefly recovered after market intelligence firm Genscape reported a drawdown of about 1.8 million barrels last week at the Cushing, Oklahoma delivery point for U.S. crude, traders who saw the data said.
If confirmed, the numbers from Genscape would be the largest since the actual drawdown of 1.87 million barrels at Cushing in the week to June 19, official data from the U.S. Energy Information Administration showed.
Even so, the drawdown data was mitigated by monthly production figures from North Dakota, the No. 2 U.S. crude producer, which showed only a slight drop in crude output in July despite prices falling more than half over the past year.
Brent has plunged from a June 2014 high above $117 to under $47 due to the largest global surplus of crude in modern times and worries about a slowing Chinese economy.
“We think we are near the floor, but nothing precludes that we temporarily move lower,” BNP Paribas global head of commodity strategy Harry Tchilinguirian told the Reuters Global Oil Forum on Monday.
Earlier on Monday, oil fell after growth in China’s investment and factory output missed forecasts in August, reinforcing chances that third-quarter growth may dip below 7 percent the first time since the financial crisis.
Additional reporting by Lisa Barrington in London and Henning Gloystein in Singapore; Editing by Chris Reese and Cynthia Osterman