* U.S. crude heads for 20 pct monthly loss, most since 2008
* Brent crude down 4 pct on the week, fifth week in red
* Oil hit by bearish Reuters July survey on OPEC oil
* 5 rigs added this week to U.S. oil rig count -Baker Hughes
(Updates prices, adds weekly U.S. oil rig data)
By Barani Krishnan
NEW YORK, July 31 (Reuters) - Oil prices fell on Friday,
with U.S. crude looking set to post the largest monthly drop
since the 2008 financial crisis after signs that top producers
in the Middle East were continuing to pump at record levels
despite a growing global gut.
A higher U.S. oil rig count for a second week in a row added
to the market's downside. Uncertainty ahead of key U.S. oil
production and rig count data due later in the day also weighed
on prices, despite a weaker dollar, which would normally support
commodities.
Diverting some attention from crude., heavy hedging activity
in gasoline RBc1 and diesel HOc1 futures ahead of
front-month contract expiration dominated play on the petroleum
complex.
Futures of global benchmark Brent and U.S. crude oil were
down more than 2 percent on the day. Brent was down 5 percent on
the week, declining for a fifth week in a row.
Through July, U.S. crude was down 20 percent, its largest
monthly decline since October 2008, when oil had an epic
collapse at the outbreak of the financial crisis. Brent fell 18
percent on the month.
July's oil-price drop was spurred by a stock market tumble
in top energy consumer China and a growing global oversupply.
A Reuters survey on Friday showed that Saudi Arabia and
other big oil producers in the Middle East, members of the
Organization of the Petroleum Exporting Countries, were not
wavering in their quest for market share over price.
According to the survey, OPEC pumped more than 32 million
barrels per day this month, up 140,000 bpd from June. OPEC/O
"The news on OPEC oil output hitting a new high is bearish
for crude," said David Thompson of Washington-based oil brokers
Powerhouse.
Also on Friday, industry firm Baker Hughes (NYSE:BHI) reported that
U.S. energy firms added five oil rigs this week after putting 21
rigs into service last week, the most in over a year, despite
the dive in U.S. crude prices from recent highs in June. RIG/U
Brent LCOc1 was down $1.11 at $52.21 a barrel at 1:18 p.m.
EDT (1718 GMT). U.S. crude CLc1 was down $1.20 at $47.32.
Commerzbank's head of commodities research in Frankfurt,
Eugen Weinberg, said OPEC has to cut production to avoid lower
prices, expressing hope on "a stricter quota discipline at its
December meeting".
The market was awaiting U.S. government data on monthly
crude production at 1800 GMT.
(Additinal reporting by Christopher Johnson in London and Keith
Wallis in Singapore; Editing by Jason Neely, Chris Reese and
Peter Galloway)