LONDON: Crude prices fell below $103 a barrel on Monday weighed down by a drop to an eight-month low in oil demand in China, the world's second-largest consumer.
An unexpected rise in US retail sales in April which pointed to underlying strength in the economy failed to change the market direction.
China's refinery crude throughput fell 3 percent in April from March, its lowest daily rate since last September, as refineries entered maintenance season. Implied oil demand was up 3.2 percent in April from a year earlier to about 9.6 million barrels per day (bpd), the lowest in eight months.
Brent crude slipped $1.27 to $102.64 barrel by 1405 GMT. US oil fell $1.19 to $94.85 a barrel.
"The economic data in China is not yet providing upward support. It is not that it is weak, it is simply not sufficient to support a bullish trend," Harry Tchilingurian, head of commodity market strategy at BNP Paribas, said.
The dollar's recent strengthening, which makes oil more expensive for holders of other currencies, also kept a lid on prices.
"The value of the dollar has weighed on the prices of all commodities, specially the more sensitive ones such as oil and gold," Tchilingurian said.
News that militants blew up the Iraq-Turkey pipeline on early Monday, stopping the flow of oil, the second attack in a week, offered some support.
The market remained bearish on the supply side, too.
"The oil market remains oversupplied, with US crude oil stocks at a record level and gasoline stocks in the Amsterdam-Rotterdam-Antwerp (ARA) region riding at a five-year high," according to analysts at Commerzbank.
The International Energy Agency (IEA) will release its monthly and medium-term supply and demand outlook on Tuesday after OPEC last week increased its outlook for 2013 demand.
"The International Energy Agency (IEA) is likely to revise its forecast for non-OPEC oil supply significantly upwards to take account of the rapid growth of shale oil production in the US Positive news about demand is therefore needed if oil prices are to climb," Commerzbank said.
Concerns that the US economy will grow at a slower pace in the second and third quarters of this year have further limited gains.
The Commerce Department said on Monday retail sales edged up 0.1 percent after a revised 0.5 percent decline in March. Economists polled by Reuters had expected retail sales to drop 0.3 percent last month.
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