Oil prices down amid rising rig count, soft US economic data

The price of oil slid Monday as traders braced for softer demand amid an increase in the number of active rigs and weak U.S. economic reports on construction spending and manufacturing.

U.S. crude was down $1.80, or 3.8 percent, to $45.32 a barrel in afternoon trading in New York, the lowest price in more than four months. Benchmark U.S. crude has been declining since reaching a high this year of $61.43 a barrel on June 10. It's down 15 percent so far this year.

Brent crude, a benchmark for international oils used by many U.S. refineries, was down $2.38, or 4.6 percent, to $49.83 a barrel in London. It's down 13 percent this year.

Several factors have put pressure on oil prices.

Oil production companies have been increasing the number of rigs they have drilling for crude in recent weeks.

The number of rigs exploring for oil in the U.S. rose by five last week to 664, according to oilfield services company Baker Hughes Inc. All told, the rig count has increased in four of the past five weeks.

That contributed to a 21 percent decline in the price of oil last month.

On Monday, a couple of economic reports weighed on oil prices, adding to growing speculation that global demand is set to weaken.

The Institute of Purchasing Managers' manufacturing index slipped to 52.7 last month from 53.5 in June. The latest reading, which economists had expected to remain unchanged from the previous month, signals that U.S. factories were a little less busy in July.

Meanwhile, the Department of Commerce said construction spending rose just 0.1 percent in June from a month earlier.

"Some of the economic numbers that came out today were not supportive of an increase in demand," said Robert Yawger, director of energy futures at Mizuho Securities USA. "It's a headline market and the headlines have all been negative."