Oil prices drop after huge rally

Oil prices fell Monday, coming under pressure as dealers took profits from huge gains in last week's rally and tried to gauge the outlook for the US economy and its need for crude.

US benchmark West Texas Intermediate (WTI) for October delivery lost $1.11 to $48.94 per barrel compared with Friday's close. It had rebounded more than 11 percent over the five previous sessions, its biggest increase in four and a half years.

Brent crude for October delivery fell 79 cents to $44.31 per barrel in early afternoon London deals in a subdued market due to a public holiday in Britain. Late last week it scored its highest weekly rise since 2009 of around 10 percent.

Dealers said last week's rally was largely due to news the US economy grew at an annual rate of 3.7 percent in the second quarter, up from a previous estimate of 2.3 percent, stoking hopes of a pickup in demand from the world's top oil consumer.

But on Monday oil "fell due to profit-taking," said analysts at Saxo Banque, along with the change of season.

"It's the end of the summer season and gasoline consumption in the United States could face a steep decline," leading to slowing demand and falling prices,

Oil has been on a roller-coaster ride in recent weeks over fears of a harder-than-expected slowdown in China, the world's top energy importer, at a time when global markets are awash with supplies.

The impact of the supply glut could be seen in the report of exports from Qatar falling more than 40 percent in value in the year to July due to plunging oil prices, according to official figures published in Doha Sunday.

At the same time production remains at high levels among members of the Organisation of Petroleum Exporting Countries (OPEC), which have exceeded their theoretical ceiling of 30 million barrels per day, as well as in the United States with its shale oil operations.

Daniel Ang, investment analyst at Phillip Futures in Singapore, said investors "remain wary of a volatile week ahead".

"We believe that bearishness is still in play, and thus, aim a support at $44.00 for WTI and $48.50 for Brent," he said.