Oil price drops, US crude in biggest monthly fall since 2008

US crude posted its biggest monthly drop since the 2008 financial crisis on Friday after a string of losses in July over China’s stock market slump and signs that top Middle East producers were pumping crude at record levels.

A higher US oil rig count for a second straight week added to the market’s downside Friday despite a weaker dollar, which would normally support commodities. Heavy hedging activity in gasoline and diesel futures ahead of front-month contract expiration dominated play on the petroleum complex, diverting some attention from crude.

US crude settled down $1.40, or almost 3 per cent, at $47.32 a barrel. It slid more than 2 per cent on the week. Through July, US crude was down 21 per cent, its largest monthly decline since October 2008, when oil had an epic collapse at the outbreak of the financial crisis.

Brent settled down $1.10, or 2 per cent, at $52.21 a barrel. It lost 5 per cent on the week and 18 per cent on the month. The sell-off continued in post-settlement, with both US crude and Brent down more than 3 per cent.