Investing.com - Oil prices edged lower in European trade on Monday, with the U.S. benchmark falling further below the $50-level amid indications of increased domestic drilling activity.
Crude oil for July delivery on the New York Mercantile Exchange fell to an intraday low of $48.21 a barrel, the weakest level June 2. It last stood at $48.56 by 07:50GMT, or 3:50AM ET, down 51 cents, or 1.04%.
On Friday, New York-traded oil prices sank $1.49, or 2.95%, after data showed the U.S oil rig count rose the second straight week last week, underlining concerns over growing supplies.
According to oilfield services provider Baker Hughes, the number of rigs drilling for oil in the U.S. increased by three last week to 328.
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.
U.S. crude futures are up nearly 85% since falling to 13-year lows at $26.05 on February 11 as a decline in U.S. shale production boosted sentiment. However, with prices now at levels that make drilling economical for some firms, the rig count might start rising soon and the decline in U.S. production may slow.
Elsewhere, on the ICE Futures Exchange in London, Brent oil for August delivery dipped 45 cents, or 0.89%, to trade at $50.09 a barrel after hitting a daily low of $49.80.
London-traded Brent slumped $1.41, or 2.71%, on Friday. Brent futures prices are up by roughly 90% since briefly dropping below $30 a barrel in mid-February as unplanned supply disruptions in Africa eased concerns over a global glut
Market participants will keep an eye out for a monthly report from the Organization of Petroleum Exporting Counties later in the session to gauge global supply and demand levels. The International Energy Agency will also release its monthly outlook report on Tuesday.
Meanwhile, Brent's premium to the WTI crude contract stood at $1.53 a barrel, compared to a gap of $1.47 by close of trade on Friday.