Crude oil slumps 2.5% to settle at 3-week low

© Reuters.

Investing.com – Crude futures settled lower on Monday, as data showed Chinese demand for oil eased in July while concerns over a rise in Opec output continued to weigh on sentiment.

On the New York Mercantile Exchange crude futures for September delivery fell 2.5% to settle at $47.59 a barrel, while on London's Intercontinental Exchange, Brent lost 2.76% to trade at $50.67 a barrel.

Chinese refineries processed 10.71 million barrels per day (bpd) in July, National Bureau of Statistics (NBS) data showed, down around 500,000 bpd from June and the lowest rate since September 2016.

The nearly twelve-month low for Chinese refinery activity comes against concerns that a glut of refined fuel products could lessen demand for oil, reducing the prospect of oil inventories falling below the five-year average, adding further pressure on oil prices.

Meanwhile, investors continued to mull over data released last week, from Opec and the International Energy Agency, showing an uptick in oil production from the cartel in July to 33 million barrels a day.

In May, Opec producers agreed to extend production cuts for a period of nine months until March, but stuck to production cuts of 1.2 million bpd agreed in November last year.

Meanwhile, oilfield services firm Baker Hughes reported on Friday, its weekly count of oil rigs operating in the United States ticked up by three rigs to a total of 768, suggesting that U.S. production may start to taper.

“The slowing rig count will mean that U.S. production will start to level off and drop,” said Phil Flynn, senior market analyst at Price Futures Group, in a daily email.