(MENAFN- FxPro) Crude oil prices dropped in early Asia on Monday after disappointing weekend trade data from China underpinned poor demand prospects.
On the New York Mercantile Exchange, crude oil for delivery in September fell 0.44% to $43.68.
Government data released on Sunday showed that Chinese inflation for July rose 1.6%, above expectations for 1.5% and up from 1.4% in June.
The producer price index fell by a more-than-expected 5.4% last month, underling concerns over the health of the world's second largest economy.
On Saturday, data showed that the country's trade surplus narrowed to $43.0 billion last month from $46.5 billion in June, compared to estimates for a surplus of $53.3 billion.
Chinese exports slumped 8.3% from a year earlier, worse than forecasts for a decline of 1.0%, while imports dropped 8.1%, disappointing expectations for a drop of 8.0%.
A slowdown in domestic demand indicated a recovery in the broader economy remains fragile and may need further government stimulus.
The Asian nation is the world's largest copper consumer, accounting for almost 40% of world consumption last year.
The mixed data is sure to raise questions about the next step for the People's Bank of China should inflationary pressure be stirring. But it's the threat of capital outflows, with the Federal Reserve looming in the background, which complicates the government's options and makes the central bank's fight to hold the line on policy the more difficult.
Last week, crude oil futures tumbled towards six-year lows on Friday, amid indications that the sharp decline in U.S. drilling in recent months may be nearing an end, raising concerns that shale production could rebound and add to a supply glut.
For the week, New York-traded oil futures plunged $2.99, or 6.9%, the eighth consecutive weekly loss, as worries over high domestic U.S. oil production weighed.
Industry research group Baker Hughes (NYSE:NYSE:BHI) said late Friday that the number of rigs drilling for oil in the U.S. increased by six last week to 670, the third straight weekly gain.
There are still about 60% fewer rigs working since a peak of 1,609 in October, though the pace of declines has slowed considerably in recent weeks, fueling concerns that U.S. shale production could rebound in the months ahead.
Elsewhere, on the ICE Futures Exchange in London, Brent for September delivery fell to a session low of $48.42 a barrel, the weakest level since March 2009, before closing at $48.61, down 91 cents, or 1.84%.
On the week, London-traded Brent futures lost $2.94, or 6.9%, the sixth straight weekly decline, as ongoing concerns over a glut in world markets continued to drive down prices.
Global oil production is outpacing demand following a boom in U.S. shale oil production and after a decision by the Organization of Petroleum Exporting Countries last year not to cut production.
Concerns over the health of China's economy, a broadly stronger U.S. dollar and prospects of higher interest rates in the U.S. later this year also weighed.
In the week ahead, investors will be looking to Thursday's U.S. retail sales data for a further indication on the durability of the economic recovery. Speeches by Federal Reserve officials on Monday will also be in focus.
Traders are also awaiting a raft of Chinese economic data in the coming week, including reports on industrial production, fixed asset investment and retail sales.
On Monday, Federal Reserve Governor Stanley Fischer and Atlanta Fed President Dennis Lockhart are to speak; their comments will be closely watched.
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