Remaining in firm Bear terrain, crude oil futures extended a prolonged losing streak on Friday as an increase in US drilling activity signaled a boost in the country's oil production in the coming months, exacerbating concerns over a global supply glut.
Baker Hughes reported that the number of rigs drilling for oil in the US rose by 21 last week to 659, the highest level since May 2015.
Traders weighed mixed US economic data which showed that manufacturing growth rebounded from a 20-month low in July, while new home sales fell to the lowest level in seven months in June, casting doubts over the fuel's demand outlook in the world's biggest economy. The gauge measuring US manufacturing climbed to 53.8 in July from 53.6 in June, with a reading above 50 signaling expansion, Markit Economics reported on Friday. Sales of new homes in the US fell 6.8 per cent to a 482,000 annualized rate in June.
Manufacturing activity in China suffered the steepest decline in 15 months in July, darkening the demand prospects for oil in the world's second biggest fuel consumer, marring sentiment.
Meanwhile, the World Bank boosted its 2015 forecast for oil prices to USD 57 per barrel from a prior estimate of USD 53 per barrel following a 17 per cent gain in prices in the second quarter. However, with crude resuming a steep sell-off in July, energy prices in 2015 are expected to average 39 per cent below last year's levels. The global lender sees world oil consumption slowing next year to 1.2 million barrels per day.
Oil may extend a sell-off today as a drop in China's industrial profits signals a worsening slowdown in the world's second biggest economy, dampening prospects for oil consumption.
At the MCX, Crude oil futures, for the August 2015 contract, closed at Rs 3,098 per barrel, down by 0.42 per cent, after opening at Rs 3,130, against the previous close price of Rs 3,111. It touched an intraday low of Rs 3,080.