Oil prices decline on disappointing export data from China

Oil prices dropped Monday amid a sharp decline in China's exports in May.

China's exports inched up merely 1 percent year on year in May from a 14.7 percent increase in April, while imports declined 0.3 percent in May from a 16.8 percent gain in the prior month, according to official data released over the weekend.

With no major US data due on Monday, investors are keeping an eye on a speech by St. Louis Fed President James Bullard on global economy. The Federal Reserve will hold its monetary policy meeting next week.

US unemployment rate in May increased slightly, from 7.5 percent in April to 7.6 percent in May. As the unemployment rate was essentially unchanged in May, easing investors' fears that the US Federal Reserve may start tapering its stimulus soon.

Standard & Poor's Ratings Services upgraded US credit outlook to stable from negative Monday morning. It believed that the US monetary authorities have both the strong ability and willingness to support sustainable economic growth.

The US dollar gained against most major currencies Monday, after Standard & Poor's upgraded US credit outlook. A stronger greenback made the dollar-denominated oil less attractive to foreign investors.

Light, sweet crude for July delivery lost 26 cents, or 0.27 percent, to settle at 95.77 dollars a barrel on the New York Mercantile Exchange.

Brent for July delivery went down 61 cents, or 0.58 percent, to close at 103.95 dollars a barrel.