UPDATE 7-Oil falls after Saudi cuts prices, China slows imports

* Saudi Arabia cuts crude prices to Asia
* Brent, WTI touch lowest since July
* China's crude imports fell in August

(Updates prices)
By Bozorgmehr Sharafedin
LONDON, Sept 7 (Reuters) - Oil prices fell on Monday after
Saudi Arabia made its deepest monthly price cuts to supply for
Asia in five months and as uncertainty over Chinese demand
clouds the market's recovery.
Brent crude LCOc1 was trading at $42.03 a barrel, down 63
cents or 1.5%, by 1555 GMT, after earlier sliding to $41.51, its
lowest since July 30.
West Texas Intermediate U.S. crude CLc1 fell 67 cents, or
1.7%, to $39.10 per barrel after hitting $38.55, its lowest
since July 10.
"The mood has turned somewhat pessimistic in the second half
of last week and the immediate risk is skewed to the downside,"
said oil broker PVM's Tamas Varga.
The world's top oil exporter, Saudi Arabia, cut the October
official selling price for Arab Light crude it sells to Asia by
the most since May. "The decrease was interpreted by the markets as a sign that
the demand recovery in the region, home to the second and third
largest oil consumers, is running out of steam," said Rystad
Energy analyst Paola Rodriguez-Masiu.
China, the world's biggest oil importer which has been
supporting prices with record purchases, slowed its intake in
August and increased its products exports, customs data showed
on Monday. "There are so many uncertainties with regard to the Chinese
economy and their relationship with key industrialised
countries, with the U.S. and these days, even Europe," Keisuke
Sadamori, director for energy markets and security at the
International Energy Agency, told Reuters. "It's not such an optimistic situation ... that casts some
shadow over the growth outlook."
The Labour Day holiday on Monday marks the traditional end
of the peak summer demand season in the United States and that
renewed investors' focus on the current lacklustre fuel demand
in the world's biggest oil user.
Oil is also under pressure as U.S. companies increased their
drilling for new supply after the recent recovery in oil prices.
U.S. energy firms last week added oil and natural gas rigs
for the second time in the past three weeks, a weekly report by
Baker Hughes Co BKR.N showed on Friday. However, hopes for potential COVID-19 vaccines lent support
to prices after Australian officials said they expected to
receive their first batches of vaccines in January, and said the
vaccines could offer "multi-year protection". <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Global oil demand set to contract in 2020 Global oil demand set
to contract in 2020 https://tmsnrt.rs/2YTCSbF
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