<p>Oil prices dropped on Monday despite a fall in US drilling activity for the fourth straight week, with analysts pointing to a poor economic growth outlook as the main reason for low crude prices.<br><br>China's August industrial profits dropped 8.8 per cent from the same month last year, and January to August industry profits were down 1.9 per cent.<br><br>"The growth problem endures. Asia isn't about to bounce," said Frederic Neumann, co-head of Asia Economics Research at HSBC in Hong Kong on Monday in a note to clients.<br><br>The International Monetary Fund (IMF) is likely to revise downwards its global economic growth outlook due to weakness in emerging markets.<br><br>Brent crude futures were at $48.13 per barrel at 0633 GMT, down 47 cents. US crude was 44 cents lower at $45.26 a barrel. Crude futures are now down more than 10 percent since the end of August.<br><br>Monday's price falls came despite an ongoing reduction in US drilling, which has been on the decline for four straight weeks, a sign continued weak prices were causing oil and gas producers to reduce drilling plans.<br><br>Yet analysts said US oil output was holding up despite the lower drilling.<br><br>"A rapid draw-down of the observed backlog of uncompleted wells could lead to higher production later this year and in 2016," Goldman Sachs said.<br><br>Analysts said US output data would likely be the main driver this week for oil prices, especially as Chinese trading slows ahead of its seven-day National Day holiday that starts on October 1.<br><br>The US Energy Information Administration is due to release its monthly petroleum supply report on Wednesday. [EIA/S]<br><br>"We expect there to be laser-focus on US production figures ... Signs that US production rolled (fell) could provide a boost to both WTI and Brent flat prices," Morgan Stanley said.<br><br>Jefferies bank said that oversupply in oil markets had halved since the second quarter to around 1 million barrels per day, and that the falling prices since June 2014 were impacting production.<br><br>"The price signal is working. US production is past its inflection and declines are accelerating ... (and) non-OPEC supply outside the U.S. is also beginning to show the effects of lower investment that arises from lower oil prices," Jefferies said.<br><br>On the demand side, Barclays said that India "remains one of the bright spots" with oil demand up 7 percent between January and August this year compared to the same period in 2014.<br><br>(Reuters)</p>
_20240527192124_original_image_21.webp)
