Oil falls towards $106 on China oil data, Iran deal

By Christopher Johnson

LONDON (Reuters) - Brent crude oil fell towards $106 per barrel on Monday, weighed down by data showing China's oil consumption slowed in 2013 and news that Iran had started implementing a nuclear deal with world powers which could eventually allow more oil exports.

Implied oil demand in China - the world's second-biggest oil consumer - rose a lacklustre 1.6 percent last year, or 150,000 bpd on the year, according to Reuters calculations based on preliminary government data.

China's implied oil demand in December was just 10.06 million barrels per day (bpd), down 7.5 percent from a record high 10.88 million bpd the year before.

"The Chinese data has contributed to negative market sentiment," said Carsten Fritsch, senior oil analyst at Commerzbank in Frankfurt. "China oil demand growth is slowing."

Brent crude oil for March was down 30 cents at $106.18 a barrel by 0945 GMT. The March contract closed up 73 cents on Friday.

U.S. crude for February delivery was trading 75 cents lower at $93.62 per barrel, after settling up 41 cents at a two-week high on Friday.

U.S. crude volumes were low on Monday. Floor trading was closed and there will be no settlement on the New York Mercantile Exchange due to the Martin Luther King, Jr. Day U.S. national holiday.

The 1.6 percent growth in China's implied oil demand last year lagged a forecast by the International Energy Agency of 3.8 percent growth.

Oil market sentiment was also dampened by news that Iran was beginning to implement the terms of a nuclear agreement with world powers, halting its most sensitive nuclear activity in a move that could lead to a lifting of sanctions.

Sanctions have cut Iran's oil exports by more than half over the past 18 months to about 1 million bpd. Tehran has said it will take six months after sanctions are lifted to return to full oil output capacity of 4 million bpd.

Expectations of more supply from Libya could also keep Brent prices under pressure this week. The Libyan government said it plans to remove protesters who have seized eastern ports used for oil exports within the next few days.

The three ports, which together accounted for 600,000 barrels per day of exports, have been occupied by heavily-armed rebels since the summer.

(Additional reporting by Jacob Gronholt-Pedersen in Singapore; editing by Keiron Henderson)