Oil Hits 4-Month Low On China Stock Market Dive, Supply Concern
NEW YORK, July 27 (Reuters) - Crude oil futures hit four-month lows on Monday after a steep drop in China's stock markets sparked concern about the economic health of the world's biggest energy consumer, while evidence of a growing crude glut mounted.
Oil was also pressured by a sharp increase in U.S. drilling activity with data on Friday showing producers added 21 rigs last week, the most in over a year, suggesting a ramp up in output as crude futures recovered from six-year lows seen in the first quarter.
A weaker dollar on Monday cushioned some of oil's losses as crude and other commodities denominated in the greenback saw higher demand from users of the euro.
Chinese stocks tumbled more than 8 percent in Asian trading, the biggest one-day drop in eight years, driving European equities markets to a two-week low.
Brent crude oil settled down $1.15, or 2 percent, at $53.47 a barrel. In post-settlement, it fell to as low as $52.90, its lowest since mid-March.
U.S. crude closed down 75 cents, or 1.6 percent, at $47.39. It fell below $47 post-settlement, the lowest since late March.
"The combination of the Chinese stock market rout and creeping crude glut is weighing on oil," said Carl Larry, director of business Development for oil and gas at Frost & Sullivan.
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