Investing.com – Crude futures settled lower on Monday, as investors continued to fret about oversupply in the industry despite recent data showing strong refinery demand from China and a slowdown in U.S. output.
On the New York Mercantile Exchange crude futures for August delivery fell 1.12% to settle at $46.02 a barrel, while on London's Intercontinental Exchange, Brent lost 0.94% to trade at $47.8.45 a barrel.
U.S. drillers added two oil rigs in the week to July 14, bringing the total to 765, Baker Hughes said on Friday. Rig additions over the past four weeks averaged five, the lowest since November, easing concerns that surging shale supplies will undermine Opec-led cuts.
The weekly rig count is an important barometer for the drilling industry and serves as a proxy for oil production and oil services demand.
The slowdown in rig additions came a few days after U.S. oil inventories fell 6.1m barrels for the week ended July 7. It was biggest weekly decline in ten months, and lifted sentiment as crude futures settled 5.2% last week.
"Last week's strong draw on U.S. oil inventories was supported by comments from the IEA that demand is growing stronger than they had initially estimated," ANZ bank said on Monday.
In Asia, China's refinery activity continued to indicate strong fuel demand, as data showed oil refineries increased throughput in June to the second highest on record.
The bullish data from China, coincided with a report from the International Energy Agency released last week, suggesting that stronger consumption in the second half of the year could offset the glut in supply.