Oil Prices Drop

Oil Prices DropOil Prices Drop

Oil prices fell to near six-year lows on Monday, as Japan's economy contracted and producers in the United States added drilling rigs for a fourth straight week despite a recent rout in prices.

Japan's economy, the second biggest in Asia and No. 3 in the world, shrank in the second quarter from a year earlier, adding to fears that slowdowns in Asia's biggest economies will weigh on oil demand, Reuters reported.

US crude, or West Texas Intermediate, for September delivery was trading 58 cents lower at $41.92 a barrel at 0712 GMT, close to more than six-year lows.

Brent futures for October delivery were down 59 cents at $48.60 a barrel, still some way from their 2015-low of $45.19. The September contract expired on Friday.

Brent for October was down 60 cents at $48.59 a barrel, still a few dollars shy of its six-year low of $45.19. The September contract expired on Friday.

"The oversupply story remains well intact, which fuels the bearish sentiment," said Carsten Fritsch, senior oil analyst at Commerzbank in Frankfurt.

Production by OPEC is running well above demand filling stockpiles worldwide. Iran is expected to increase its oil exports once western sanctions are lifted by Jan. 2016.

Many analysts expect prices to remain depressed as bearish factors hinting at sustained oversupply are set to persist.