Investing.com - Crude oil prices dipped further in Asia on Monday as oversupply worries dominated the market as well as demand prospects from the U.S. as the Federal Reserve mulls an interest rate hike.
On the New York Mercantile Exchange, crude oil for delivery in September fell 0.21% to $48.04 a barrel.
Last week, U.S. oil futures fell to the lowest level in almost four months on Friday, after data showed that rigs drilling for oil in the U.S. rose last week, underlining concerns over robust domestic production.
On the week, New York-traded oil futures tumbled $2.97, or 5.99%, the sixth consecutive weekly loss, as worries over high domestic U.S. oil production weighed.
Nymex oil prices fell to the lowest levels of the session 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 21 last week to 659, the most since May.
Elsewhere, on the ICE Futures Exchange in London, Brent for September delivery declined 65 cents, or 1.18%, to close at $54.62 a barrel after hitting a session low of $54.30, the weakest level since April 2.
For the week, London-traded Brent futures lost $2.50, or 4.34%, the fourth straight weekly decline, 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 earlier in the month 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.
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.
Concerns over the health of China's economy also weighed. The preliminary reading of the Caixin/Markit manufacturing purchasing managers’ index fell to a 15-month low of 48.2 this month from a final reading of 49.4 in June.
China is the world's second largest oil consumer after the U.S. and has been the engine of strengthening demand.
In the week ahead, market players will focus on the outcome of the Federal Reserve's highly-anticipated policy meeting on Wednesday as well as the release of preliminary second quarter growth data on Thursday.
The Federal Reserve said Friday it inadvertently released confidential staff economic projections to its public Web site June 29 and then made the information public - and then, Friday night, issued a corrected version.
The staff estimates projected the federal funds rate at 0.35% in this year's fourth quarter, up slightly from the current range of zero to 0.25%, suggesting to some analysts that the change was a reflection of the possibility of liftoff before year end.
For next year the nominal Fed funds rate goes to 1.26% by the fourth quarter, 2.12% by the end of 2017, 2.80% by the end of 2018, 3.17% by late 2019 and 3.34% in the fourth quarter of 2020.
Estimates of long-run inflation expectations for 2015 to 2017 were 1.80%, 1.83% in 2018, 1.86% 2019 and 1.88% in 2020.
The Fed said the information is part of code uploaded about every three months to feed into the Fed's model of the U.S. economy "including a set of illustrative economic projections."
Meanwhile, investors will continue to monitor progress in Greece’s €86 billion bailout negotiations. Athens is aiming for a deal by mid-August.
On Monday in the euro zone, the Ifo Institute is to report on German business climate.
The U.S. is to release data on durable goods orders.