Oil settles below $70
Chinese stocks plummet, prompting global selloff and placing pressure on crude.
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NEW YORK (CNNMoney.com) -- Fears over the strength of China's markets dealt a blow to oil prices Monday, bruising optimism about economic recovery and sending crude almost 4% lower to below $70 a barrel.
U.S. crude for October settled $2.78 lower to $69.96 a barrel, having fallen as low as $69.13 earlier in the session.
U.S. stocks tumbled in late afternoon trading, extending a broader selloff across global markets.
"Both crude and stocks are gauging the economic upturn, and today's news threw cold water on it," said James Cordier, president at Liberty Trading Group.
The American market took cues from Chinese stocks, which sank 6.74% to a three-month low on worries about bank lending. China is the world's second-largest oil consumer, after the U.S.
Crude prices have tended to follow stocks recently, as investors look to the broader markets to try to gauge when fuel demand will rebound.
"We're seeing that earlier hopes on growth may have been overstated," Cordier said. "Investors are thinking: If their economy is not doing well, whose is?"
The Organization of the Petroleum Exporting Countries -- whose members produce about 40% of the world's crude -- will meet Sept. 9 in Vienna to discuss output targets. According to news reports, several OPEC officials have said the group is likely to leave levels unchanged.
Earlier this month, recovery hopes helped push crude to settle at a 10-month high near $75 a barrel, as U.S. stocks briefly hit 2009 records. But the failure to cross the $75 threshold dented confidence, and recent data have painted a mixed picture -- leaving investors to question when fuel demand will recover.
Cordier predicted crude will trade in a tight band between $60 and $65 in the fourth quarter. 
