By Biman Mukherji 
 

HONG KONG--Oil prices are trading near four-month lows on Tuesday as a plunge in Chinese equities battered investment sentiment.

The sell off in equities market is being seen as a symptom of a wider economic malaise affecting China, which could depress demand from one of the largest consumers of crude oil.

"We are seeing such a big drop in stocks in a major economy and that has weakened the sentiment," said Daniel Ang, investment analyst with Phillip Futures.

The concerns also come in the wake of a rise in weekly numbers for U.S oil drilling rigs which could add to a supply overhang.

The bearish sentiment in oil has increased over the past few days as Iran's output is expected to add to a stream of oil supplies for which there are fewer takers.

Nymex oil futures for the near-month September contract slipped below $47 per barrel, but is now at $47.15 per barrel, down 24 cents from the previous settlement. It earlier hit a low of $46.92 during the day, its lowest since mid-March.

Brent crude, the global oil benchmark, was down 32 cents at $53.15 a barrel on London's ICE Futures exchange.

For some producers lower oil prices means an intensifying market share war, an ANZ report said.

It added that Iraq's oil exports from the south climbed to a record 3 million barrel per day, a 10% increase month-on-month.

At the same time the self-ruled Kurds in the north are also shipping crude independently, adding to the global supply.

Nymex reformulated gasoline blendstock for August--the benchmark gasoline contract--fell 0.6% to $1.8095 a gallon.

Write to Biman Mukherji at biman.mukherji@dowjones.com