Crude oil prices are likely to slump to over four-month low in opening session Monday on increasing supplies in global markets and a disappointing data from China over the weekend showed exports tumbled in the world's second-largest economy, analysts said.
"Weak demand and rising supplies in global markets are likely to pressurise the prices of crude," said Ajay Kumar Kedia, research analyst with Kedia Commodities.
Oil-field services firm Baker Hughes Inc. said Friday that the number of rigs drilling for oil in the U.S. rose for the third straight week. Though there are still 58% fewer rigs operating compared with October 2014, the recent rise in rigs sparked concerns that a glut will continue to weigh on the market.
US production rose to near the highest level since the 1970s in the last week, edging up to 9.5 million barrels per day, according to government data.
Crude oil may also be under pressure after a government data indicated a slowdown in the Chinese economy, analysts said.
China imports fell 8.1% in July compared to analysts' estimate of 8.1% fall and 6.1% de-growth for the same period a year earlier, data by the National Bureau Statistics of China showed.
Exports in China also declined to 8.3% for the same period compared to 2.8% growth a year ago.
West Texas Intermediate, the US benchmark, for September delivery fell 1.77% to $43.87 a barrel on the New York Mercantile Exchange Friday.
Brent, European benchmark for September contract plunged 1.70% to $49.21 per barrel, on the London-based ICE Futures Europe Exchange Friday.
Crude oil for August delivery fell 0.80% to Rs 2,824 per barrel, at the closing of trades Friday, its lowest level since Mar 19, on Multi-Commodity Exchange (MCX).
Crude oil prices for August delivery are likely to find support at Rs 2,770 per barrel and resistance at Rs 2,914 per barrel today on Multi-Commodity Exchange (MCX).
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