West Texas Intermediate futures for October delivery plunged to $39.14 (-3.24%), while Brent crude fell to $44.29 (-2.57%) as investors took China's slowing economy for a sign of weaker demand amid ongoing oversupply. However data suggest that China's demand remains firm: the country's crude-oil imports rose 1.7 million barrels a day in July from a year earlier to 7.4 million barrels a day.

Iran's Oil Minister Bijan Zanganeh said that his country intends to raise oil output. Meanwhile the number of active drilling rigs in the U.S. rose in seven weeks out of eight and it currently stands at 674.