Oil extended its biggest monthly slump in nearly 7 years as Iran vowed to boost output almost immediately after sanctions against the Persian Gulf producer are lifted.

Futures in New York dropped as much as 1.6 percent, after capping a 21 percent drop in July on Friday. Iran can increase production by 500,000 barrels a day within a week after the end of sanctions and by 1 million barrels a day within a month after that, said state-run Islamic Republic News Agency, citing Oil Minister Bijan Namdar Zanganeh.

Crude slipped into a bear market last month as raw materials slumped amid expanding supplies and concerns that demand in China may falter with slower economic growth. Sanctions against Iran’s oil industry should be lifted by late November, Iranian oil ministry’s Shana news agency reported.

West Texas Intermediate for September delivery lost as much as 77 cents to $46.35 a barrel in electronic trading on the New York Mercantile Exchange and was at $46.81 at 8 a.m. Singapore time. Total volume was 97 percent above the 100-day average for the time of day.

Brent for September settlement slipped 45 cents to $51.76 a barrel on the London-based ICE Futures Europe exchange. Prices are down 24 percent since this year’s high on May 6. The European benchmark crude traded at a premium of $4.96 to WTI.

Source : Bloomberg