(MENAFN- FxPro) Growing concerns over demand from China and Japan sent crude oil prices down on Monday in Asia as investors also noted a major industrial accident last week in the Chinese port city of Tianjin may also disrupt economic activity for a considerable period as cleanup gets underway.
On the New York Mercantile Exchange, crude for delivery in September dropped 1.36% at $42.562, down 0.24% on the day.
Earlier, Japan said second quarter economic growth fell 0.4%, less than the drop of 0.5% expected and at an annual pace of down 1.6%, also better than the 1.8% decline seen.
Last week, crude oil futures edged higher late Friday after falling to six-and-a-half year lows earlier in the session amid concerns over the demand outlook from China following the country's devaluation of the yuan.
For the week, New York-traded oil futures were off 3.33%, the seventh consecutive weekly loss.
On the ICE Futures Exchange in London, the October Brent contract was down 1.81% to $48.73 a barrel in late trade.
Oil prices found some support after data showing that U.S. producer prices were higher for a third straight month in July, while factory output increased at the fastest rate in eight months.
But another report showed that U.S. consumer sentiment dipped slightly in this month.
The largely positive data bolstered the outlook for third quarter growth and underlined expectations for a rate hike by the Federal Reserve as early as next month.
But concerns over a global supply glut and a recent string of data pointing to slowing industrial and economic growth in China continued to weigh on the demand outlook.
Oil prices were also hit by fears that Chinese demand for oil will drop after the country devalued its currency in a surprise move on Tuesday, as a weaker yuan would make imports more expensive.
On the supply side, 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 two last week to 672, the fourth straight weekly gain.
Earlier in the week, the data showed that while U.S. crude-oil stockpiles were lower for the third straight week, the extent of the decline was less than had been forecast.
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.
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