LONDON — Oil fell on Monday as Chinese equities weakened, with a firmer dollar and global oversupply fears weighing on prices.
The US Labour Day holiday helped keep trade thin.
China’s main indices closed down on Monday as investors sold shares in the aftermath of a four-day market holiday, during which further restrictions on futures trading were announced.
"Oil is only taking its cues from China this morning," SEB chief commodity analyst Bjarne Schieldrop said.
"The price is taking little notice of constructive data like stronger (European) equities, stronger base metals and last Friday’s fall in US rig count," he said.
Brent crude for October was down 60c at $49.01 a barrel at 8.55am GMT. US crude for October, also known as West Texas Intermediate (WTI), was down 45c at $45.60.
Oil has fallen almost 60% since June 2014 on a global supply glut. Prices have seesawed in recent weeks as concerns about a slowing Chinese economy caused turmoil in global stock markets.
A surprise gain in US crude stocks of 4.7-million barrels in the week to August 28, the biggest one-week rise since April, added to worries of an oil glut.
That was despite the number of US oil rigs falling by 13 to 662 last week, according to Baker Hughes data, the first decline in rig counts in seven weeks.
A firmer US dollar also hurt oil prices by making the commodity more expensive for holders of other currencies.
Phillip Futures oil analyst Daniel Ang sees no sign of an immediate rally in crude.
"Iranian oil flowing back into the market is dampening any bullish sentiment," Mr Ang said.
"Prices should be moving downwards this week as prices would hardly find support. Prices could move towards $43.53 and $46.81 for WTI and Brent."
The year-long decline in oil prices has led to Britain’s North Sea oil and gas sector cutting more than 5,000 jobs since late last year, the country’s new Oil and Gas Authority said on Monday.
Investors are awaiting eurozone gross domestic product figures for the second quarter on Tuesday, followed by monthly global oil supply and demand data from US and global energy authorities to give oil further direction.
If the US continues to see rig and production cuts this may become a constructive development for oil prices, analysts said.
