Oil prices rebound from new lows

[LONDON] Oil prices rose on Monday but not before striking fresh multi-month low points on the back of more poorly received Chinese economic data.

Brent North Sea crude for delivery September climbed US$1.17 compared with Friday's close to stand at US$49.78 a barrel in London late afternoon deals as dealers snapped up cheaper oil.

In Asian trading hours, the contract had dropped to US$48.24 - the lowest level since the end of January.

US benchmark West Texas Intermediate (WTI) for September delivery meanwhile gained 63 US cents to US$44.50. Earlier Monday, it had reached a 4.5-month low at US$43.35 a barrel.

The market was being "driven by a combination of rising US rig count data Friday and bearish China statistics over the weekend", said Bjarne Schieldrop, chief analyst at Commodities SEB Markets.

Data over the weekend showing China's foreign trade performance worsened in July added to the pressure on oil prices Monday, traders said.

Concerns meanwhile about a global supply glut were stoked on Friday when Baker Hughes said the number of US drilling rigs rose for the third straight week.

The count rose to 670, the oilfield services firm reported, just days after the US government reported an increase in oil production in the world's top consumer.

A glut in crude oil supply is seen as the main driver for a sharp decline in oil prices that has seen crude slump to almost a third of its mid-2014 peaks.

News of rising US production comes as top producing cartel OPEC has refused to cut output, and as investors wait for Iran to ramp up exports after a major deal over its nuclear programme last month.

In exchange for curbing its nuclear activities, Tehran will see the lifting of sanctions, which have slashed its oil exports.

AFP