Oil Down 3 pct; China, Iran, Gasoline in Play

Brent crude down almost 3 pct; U.S. crude off 2 pct.

Crude oil fell about 3 percent on Monday after a tumble in gasoline futures added pressure to a market already slumping on slower growth in China and signs that Iranian oil will return to market soon because of a nuclear deal likely to be implemented this year.

A stronger dollar and softer equity markets on Wall Street added weight to the petroleum complex, traders said.

"The products markets seem to be taking a hit over concerns the refinery maintenance season has peaked, and there could only be inventory builds from here," said Pete Donovan, broker at New York's Liquidity Energy.

The front-month in Brent, the global crude benchmark, was down $1.35, or 2.7 percent, at $49.11 a barrel by 1:50 p.m. EDT (1750 GMT).

U.S. crude was down $1.05, or 2.2 percent, at $46.21, in lighter volume trades ahead of Tuesday's expiry for the November contract as front-month.

In early trading, gasoline tumbled as much as 5 percent, on worries U.S. refinery utilization could pick up with declining maintenance work. Ultralow sulfur diesel was down 2 percent.

Both gasoline and diesel prices came off their lows on news that Phillips 66's 275,000-barrel-per-day Bayway refinery in Linden, New Jersey, one of the largest on the U.S. East Coast, was shut after a transfomer malfunction. The company later said the refinery was "stable" and running at "reduced rates on an interim basis".

The refining profit for gasoline, known as the gasoline crack <CL-RB1=R>, was at its lowest since January. The diesel crack traded near a one-week low.

China's economy grew at the slowest pace in six years in the third quarter, according to official data released on Monday.

Data also showed that Chinese oil demand fell slightly in September.

Iran's nuclear negotiator said on Monday he was hopeful for an implementation before year-end of the nuclear deal between Tehran and Western powers. A senior Iranian oil official also said the OPEC member will boost production by 500,000 barrels a day within one week of the sanctions being lifted.

The Buzzard oilfield in the North Sea, the largest contributor to the Forties crude stream that helps to set the global oil price, was, meanwhile, gradually ramping up production after a four-day outage.

Austrian oil producer OMV lowered its forecasts for crude prices, envisioning $55 a barrel for 2016; $70 in 2017; $80 in 2018 and $85 a barrel from 2019 onwards.

By Barani Krishnan