* Futures set for fourth weekly loss
* Weak China factory data dents oil demand outlook
* Seasonal demand in U.S. has limited downside this week
(Updates with comment, refreshes prices)
By Amanda Cooper
LONDON, July 24 (Reuters) - Oil prices neared four-month
lows on Friday, set for their fourth straight week of declines,
after data showed a contraction in China's factory sector and
the dollar rose against a basket of currencies.
Data showing activity in China's manufacturing sector shrank
at the fastest pace in 15 months in July adds to concern about
demand at a time when the crude market is already oversupplied
to the tune of some 2 million barrels per day. ID:nL3N1032YR
Brent crude LCOc1 was down 28 cents at $54.99 a barrel by
1345 GMT, having hit an intraday low of $54.80, its lowest since
early April.
Brent has lost nearly 13 percent in July, its largest
one-month fall since a near 19 percent loss in January, although
downside has been less severe this week. Prices traded in the
tightest weekly range in 11 months, as strong seasonal demand,
particularly for gasoline in the U.S. summer driving season,
helped mitigate the longer-term effect of a global supply glut.
This cushion, however, is likely to be short-lived.
"You have ... global crude runs peaking right now. The
physical market has done a bit better because European refinery
demand has been very strong," Chris Main, an oil strategist at
Citi, said.
"So this is as good as it gets for crude demand, but we've
had this wealth of supply come down."
U.S. crude for September delivery CLc1 rose 12 cents to
$48.57 a barrel, having settled on Thursday down 74 cents at
$48.45, the lowest since March 31.
Both benchmarks have posted losses this month, partly due to
a stronger dollar, which makes it more profitable for non-U.S.
investors to sell commodities, and partly on expectations of
greater Iranian supply following last week's deal over Tehran's
nuclear programme with world powers. ID:nL5N1034H3
U.S. crude has lost 18 percent in July, the biggest
one-month decline since December and the second-largest monthly
loss in the last seven years.
"We won't see much big (price) movement until we start to
see some kind of concrete thoughts on whether (the motion on
Iranian) sanctions is likely to pass in the U.S. Congress or
not, that's the next big thing on my calendar," Capital
Economics commodities economist Tom Pugh said.
Analysts believe that the prospect of lower oil prices could
force the world's top producers to cut spending as they face the
prospect of yet another hit to quarterly profits.
ID:nL5N1023IJ
(Editing by Dale Hudson)