<div>Oil prices fell to their lowest in nearly six months on Tuesday (28 July), as a rout in the Chinese stock market cast further doubt over the outlook for crude demand in the world's top commodities consumer.</div><div> </div><div>China's already-volatile benchmark stock index, with a combined market capitalisation of $4.6 trillion, has lost 10% in the last two days of trade.</div><div> </div><div>Most household debt is linked to real estate rather than the stock market, but with Chinese economic growth struggling to stick at 7%, analysts say demand for crude may not be enough to help mop up a global supply glut.</div><div> </div><div>"Typically, equity markets do have a high correlation to quarterly GDP growth," Deutsche Bank strategist Michael Lewis said.</div><div> </div><div>"Naturally, there is some risk that this could spill into the real economy. The more these things go down on a day-by-day basis, that is starting to affect the potential of Chinese demand growth being weaker."</div><div> </div><div>Brent was down 72 cents at $52.75 a barrel by 1054 GMT, having hit a session low of $52.28, its lowest since early February, bringing the losses for July to nearly 18%.</div><div> </div><div>Brent crude is on track for its longest stretch of daily losses since March, when the price hovered just dollars away from six-year lows.</div><div> </div><div>US crude was last down 33 cents at $47.06 a barrel after ending the previous session down 75 cents.</div><div> </div><div>Adding to the uncertainty over the health of the Chinese economy is concern about rising global oil production in a market already oversupplied by some 2 million barrels a day.</div><div> </div><div>Investors are watching for weekly data on US inventory levels to gauge the strength of demand.</div><div> </div><div>US commercial crude oil stocks likely slipped last week after crossing the five-year seasonal average build in the previous week, a preliminary Reuters poll of analysts showed ahead of industry and official weekly reports.</div><div> </div><div>Crude stocks fell about 300,000 barrels to 463.6 million barrels in the week ended July 24, analysts estimated.</div><div> </div><div>"We're not seeing the level of demand in the US one usually expects related to the summer drive-time," said Jonathan Barratt, chief investment officer at Sydney's Ayers Alliance.</div><div> </div><div>"The world is awash with oil."<br><br>(Reuters)</div>
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