Investing.com - Crude slumped further in early Asia on Monday with markets in Japan shut for a holiday and little on the regional data calendar on the day, but key trade data from China later this week.
On the New York Mercantile Exchange, crude oil for delivery in February dropped 2.11% to $32.46 a barrel.
In the week ahead, investors will continue to focus on economic reports out of China, with Wednesday’s trade data in the spotlight.
The U.S. is to release data on retail sales, producer prices and consumer sentiment later in the week, while Thursday’s monetary policy meeting minutes from the Bank of England will also be in focus.
Last week, oil prices ended Friday’s session close to the lowest level in more than a decade as lingering concerns over China’s economic outlook added to the view that a global supply glut may stick around for much longer than anticipated.
On the ICE Futures Exchange in London, Brent oil for February delivery shed 20 cents, or 0.59%, on Friday to close the week at $33.55 a barrel after sinking to $32.16 on Thursday, the lowest since April 2004.
Prices showed little reaction after industry research group Baker Hughes said late Friday that the number of rigs drilling for oil in the U.S. decreased by 20 to 516 last week. Despite the declining rig count, U.S. production levels remain near record-high levels.
Global crude production is outpacing demand following a boom in U.S. shale oil and after a decision by the Organization of the Petroleum Exporting Countries last year not to cut production in order to defend market share.
Most market analysts expect a global glut to worsen this year due to soaring production in North America, Saudi Arabia and Russia.
The oversupply issue will be exacerbated further once Iran returns to the global oil market early next year after western-imposed sanctions are lifted. Analysts say the country could quickly ramp up production by around 500,000 barrels, adding to the glut of oil that has sent prices tumbling.
Oil also came under pressure Friday from a broadly stronger U.S. dollar. The greenback gained after the Labor Department reported that the U.S. economy added 292,000 jobs last month, easily surpassing forecasts of 200,000.
Dollar-priced commodities become more expensive to investors holding other currencies when the greenback gains.