Investing.com – Crude oil futures sank to multi-month lows on Monday, as worries over a glut of supply, slowing demand from China and a stronger U.S. dollar continued to batter commodities markets.
On the ICE Futures Exchange in London, for September delivery hit a session low of $50.38 a barrel, a level not seen since January 30, before trading at $50.52 during U.S. morning hours, down $1.70, or 3.25%.
On Friday, London-traded Brent futures lost $1.10, or 2.06%, to end at $52.21. London-traded Brent futures dropped $2.24, or 4.41%, last week, the fifth straight weekly decline.
Prices tumbled $11.39, or 18.6%, in July, amid concerns a resumption of Iranian oil exports will add to a global glut.
Iran and six world powers reached a long-awaited nuclear deal in July that would end sanctions on Tehran in exchange for curbs on the country’s disputed nuclear program. Iran reportedly hoards 30 million barrels of oil in its reserves ready for export.
Reports of record high oil exports from Iraq and robust production from Saudi Arabia also contributed to losses.
Global oil production is outpacing demand following a boom in U.S. shale oil production and after a decision by the Organization of Petroleum Exporting Countries last year not to cut production.
Elsewhere, U.S. oil futures fell to the lowest level in more than four months, as ongoing worries over high domestic U.S. oil production weighed.
for delivery in September on the New York Mercantile Exchange hit an intraday low of $45.88 a barrel, the weakest level since March 23, before trading $46.02, down $1.10, or 2.33%.
On Friday, Nymex oil futures slumped $1.40, or 2.89%, to close at $47.12. New York-traded oil futures declined 88 cents, or 2.12%, last week, the seventh consecutive weekly loss.
Nymex oil prices plunged $12.22, or 21.24%, in July, the biggest monthly loss since October 2008.
Industry research group Baker Hughes (NYSE:) said Friday that the number of rigs drilling for oil in the U.S. increased by five last week to 664, the second straight weekly gain.
Meanwhile, the spread between the Brent and the WTI crude contracts stood at $4.50 a barrel, compared to $5.09 by close of trade on Friday.
A pair of disappointing manufacturing reports underlined concerns over the health of China’s manufacturing sector.
The for July released on Monday fell to 47.8 from a preliminary reading of 48.2. It was the lowest reading since July 2013.
The official China’s published on Saturday dipped to 50.0 last month from 50.2 in June, as new orders declined.
China is the world’s second-largest oil consuming nation and manufacturing numbers are used as indicators for fuel demand growth.
Meanwhile, the , which measures the greenback’s strength against a trade-weighted basket of six major currencies, was at 97.50 early on Monday, up 0.2% on the day.
The dollar index rose 1.86% in July, boosted by expectations that the Federal Reserve could raise rates as soon as September if the economy continues to improve as expected.
Dollar-denominated oil futures contracts tend to fall when the dollar rises, as this makes oil more expensive for buyers in other currencies.