Crude oil prices fell further in Asia on Monday with sentiment downbeat on supply after a rise last week in the U.S. rig count with mild inflation in China not immediately boosting the outlook for demand.
On the New York Mercantile Exchange, crude oil for delivery in August dropped 0.79% to $45.05 a barrel. On the ICE Futures Exchange in London, Brent oil for September delivery fell 0.71% to $46.43 a barrel.
At the weekend, China reported that the pace of gains in the Consumer Price Index moderated further to 1.9% year-on-year in June because of mainly weaker gains in food prices and at the slowest pace since January, when the National Bureau of Statistics changed the weighting of the basket of goods that make up the index.
Food prices rose 4.6% year-on-year in June, down from a 5.9% increase in May and 7.4% jump in April. Pork prices, the biggest driver of consumer inflation in the past few months, rose by 30.1% year-on-year, down from 33.6% year-on-year in May.
The data suggests that China is in a sustained period of moderate inflation even as worries about deflation have dissipated, making it less likely that the People's Bank of China will resort to aggressive monetary easing to support the economy, but also more likely it will keep rates low.
Some support for crude was seen on comments by Saudi Arabia's energy minister Khalid al-Falih at the weekend repeating the market was more balanced and prices were stabilizing.
Last week, oil futures ended Friday’s session close to two-month lows as concerns over the global economic outlook combined with data showing that the U.S. oil rig count rose for the fifth time over the past six weeks weighed.
Despite Friday’s gains, London-traded Brent futures dropped $3.84, or 7.13%, on the week, its worst weekly performance since mid-January, amid growing anxiety over the economic impact of Britain's vote to leave the European Union.
The news sparked concerns that Europe will fall back into recession, putting more pressure on the global economy and undermining future oil demand prospects.
Oilfield services provider Baker Hughes said late Friday that the number of rigs drilling for oil in the U.S. increased by 10 last week to 351, marking the fifth increase in six weeks.
The renewed gain in U.S. drilling activity fueled speculation that domestic production could be on the verge of rebounding in the weeks ahead, underlining worries over a supply glut.
According to the U.S. Energy Information Administration, crude oil inventories declined by a less-than-expected 2.2 million barrels last week to 524.4 million, which the EIA considered to be “historically high levels for this time of year”.
In the week ahead, oil traders will be focusing on U.S. stockpile data on Tuesday and Wednesday for fresh supply-and-demand signals.
Meanwhile, investors will keep an eye out for monthly reports from the Organization of Petroleum Exporting Counties and the International Energy Agency to gauge global supply and demand levels.
Market swing
crude oil signals
comex signals
On the New York Mercantile Exchange, crude oil for delivery in August dropped 0.79% to $45.05 a barrel. On the ICE Futures Exchange in London, Brent oil for September delivery fell 0.71% to $46.43 a barrel.
At the weekend, China reported that the pace of gains in the Consumer Price Index moderated further to 1.9% year-on-year in June because of mainly weaker gains in food prices and at the slowest pace since January, when the National Bureau of Statistics changed the weighting of the basket of goods that make up the index.
Food prices rose 4.6% year-on-year in June, down from a 5.9% increase in May and 7.4% jump in April. Pork prices, the biggest driver of consumer inflation in the past few months, rose by 30.1% year-on-year, down from 33.6% year-on-year in May.
The data suggests that China is in a sustained period of moderate inflation even as worries about deflation have dissipated, making it less likely that the People's Bank of China will resort to aggressive monetary easing to support the economy, but also more likely it will keep rates low.
Some support for crude was seen on comments by Saudi Arabia's energy minister Khalid al-Falih at the weekend repeating the market was more balanced and prices were stabilizing.
Last week, oil futures ended Friday’s session close to two-month lows as concerns over the global economic outlook combined with data showing that the U.S. oil rig count rose for the fifth time over the past six weeks weighed.
Despite Friday’s gains, London-traded Brent futures dropped $3.84, or 7.13%, on the week, its worst weekly performance since mid-January, amid growing anxiety over the economic impact of Britain's vote to leave the European Union.
The news sparked concerns that Europe will fall back into recession, putting more pressure on the global economy and undermining future oil demand prospects.
Oilfield services provider Baker Hughes said late Friday that the number of rigs drilling for oil in the U.S. increased by 10 last week to 351, marking the fifth increase in six weeks.
The renewed gain in U.S. drilling activity fueled speculation that domestic production could be on the verge of rebounding in the weeks ahead, underlining worries over a supply glut.
According to the U.S. Energy Information Administration, crude oil inventories declined by a less-than-expected 2.2 million barrels last week to 524.4 million, which the EIA considered to be “historically high levels for this time of year”.
In the week ahead, oil traders will be focusing on U.S. stockpile data on Tuesday and Wednesday for fresh supply-and-demand signals.
Meanwhile, investors will keep an eye out for monthly reports from the Organization of Petroleum Exporting Counties and the International Energy Agency to gauge global supply and demand levels.
Market swing
crude oil signals
comex signals
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