West Texas Intermediate futures for September delivery, which expires today, plunged to $40.82 (-1.21%), while Brent crude fell to $46.15 (-1.01%) after China (world's second biggest consumer of oil) added to demand concerns amid disappointing data from Markit Economics. The flash China Manufacturing PMI came in at 47.1 in August compared to July final reading of 47.8. The index missed analysts' expectations for a modest decline to 47.7. This is the fastest pace of declines in six and a half years.

Meanwhile oversupply persisted.