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Oil prices slide at start of week

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A shake-up of Saudi Arabia's oil leadership by King Salman has introduced a new element of unpredictability to its energy policymaking at a moment when Riyadh is grappling with slumping crude prices and its war in neighbouring Yemen.

[LONDON] Oil prices slid on Monday amid market volatility, as investors assessed the outlook for US interest rates.

US benchmark West Texas Intermediate for delivery in October dropped US$1.44 to US$44.61 a barrel compared with the close on Friday.

Brent North Sea crude for October was down US$1.64 to US$47.97 in late London deals.

Trading volumes were down owing to Labour Day in the United States, helping to exaggerate the day's losses according to dealers.

All eyes were on the United States, the world's biggest consumer of oil, with a decision on interest rates set to influence financial markets whatever the outcome of the Fed's policy meeting next week.

A rate hike would likely strengthen the greenback, making dollar-priced oil more expensive to holders of weaker currencies, hurting demand and prices.

Analysts said dealers are awaiting a slew of global economic data this week for clues about crude demand, with ample oil supplies boosted by relentless US and Opec production.

The Chinese government is scheduled to release monthly trade and inflation figures, as well as industrial output, fixed-asset investment and retail sales in the coming days.

Oil prices have fluctuated wildly in recent weeks on uncertainty about Fed monetary policy as well as worries about the growth in world number-one energy consumer China.

"Persistent concerns regarding the Chinese slowdown were the main drag lower for the oil market (Monday) as Chinese consumption is estimated to have declined strongly in recent months," said Myrto Sokou, senior research analyst at Sucden Financial.

AFP