Investing.com - Crude oil prices were quoted sharply lower in early Asia on Monday, reversing last week's gains as investors eye global demand.
On the New York Mercantile Exchange, crude oil for delivery in October fell 1.07% to $44.76 a barrel in early trade.
In the week ahead, investors will be focusing on Friday’s U.S. jobs report for August, which could help to provide clarity on the likelihood of a near-term interest rate hike.
Markets will also be watching surveys of the manufacturing and service sectors, factory orders and trade data from the world’s largest economy for fresh indications on the timing of a rate hike.
Comments by Federal Reserve Vice Chairman Stanley Fischer on Friday suggested that the door was still open for a rate hike at the Fed's next meeting due to take place September 16-17.
Fischer said that the case for a rate increase in September was "pretty strong", though it was still too soon to say what the central bank might do.
The timing of a Fed rate hike has been a constant source of debate in the markets in recent months.
On Monday, the U.S. is to release figures on manufacturing activity in the Chicago region.
Last week, crude oil futures surged for the second consecutive session on Friday, capping the biggest two-day percentage gain since 2009, as traders returned to the market to close out bets on lower prices, a move known as short-covering.
For the week, New York-traded oil futures rallied $4.92, or 11.79%, snapping a ten-week losing streak. That was the largest weekly percentage gain since March 2009
On the ICE Futures Exchange in London, Brent for October delivery rose to a session peak of $50.98 a barrel, the strongest level since August 11, before closing at $50.05, up $2.49, or 5.24% for the day.
Oil prices rebounded from steep declines suffered earlier in the week as Chinese equity markets bounced back from a brutal selloff, easing jitters over an ongoing stock market collapse.
The Shanghai Composite rallied 4.9% on Friday, with gains accelerating in the final half-hour of trade. Friday's rally followed a 5.4% surge on Thursday.
China's central bank boosted liquidity, cut interest rates and lowered the reserve requirement ratio for large lenders earlier this week in a bid to boost economic growth and halt a stock market rout.
The turmoil in markets began when China unexpectedly devalued the yuan on August 11, sparking fears that the economy may be slowing at a faster than expected rate.
China is the world's second largest oil consumer after the U.S. and has been the engine of strengthening demand.
Crude oil prices have been under heavy selling pressure in recent months, as ongoing concerns over a glut in world markets drove down prices.
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.
Worries over high domestic U.S. oil production are likely to remain in focus after industry research group Baker Hughes (NYSE:NYSE:BHI) said late Friday that the number of rigs drilling for oil in the U.S. increased by one last week to 675, the sixth straight weekly gain.
The rig count dropped for 29 straight weeks before rebounding modestly in recent weeks.