LONDON: Brent crude oil dipped below $103 a barrel on Monday as data showed manufacturing growth faltering in Europe and China at a time of ample fuel supply.
Euro zone manufacturing growth slowed more than expected last month and factory activity in several key countries appeared to be stagnating. French factory output fell at its fastest in 15 months in August.
Chinese factory growth slipped to a three-month low in August as foreign and domestic demand cooled, muddying the outlook for demand from the world's key consumer of most commodities.
Oil supply, meanwhile, is more than sufficient to meet demand, encouraging storage of oil and depressing prices. Brent crude was 30 cents lower at $102.89 a barrel by 0830 GMT. US crude traded 40 cents lower at $95.56 a barrel. Floor trading in the United States is closed on Monday for the Labor Day holiday.
"Crude prices appear to have stabilised," said Michael Wittner, oil analyst at French bank Societe Generale.
"However, there are significant factors that will prevent a near-term price recovery," he added. "Exports of Libyan light sweet crude are growing, and increasing volumes of crude are being placed in storage, which will maintain downward pressure."
Libya's oil production has increased in recent months, rising to 700,000 barrels per day (bpd), state-run National Oil Corp (NOC) said on Sunday, putting it 50,000 bpd higher than what was reported early last week. Oil is finding some support from world political tensions.
Iraqi army and Kurdish forces have been battling Islamic State fighters in a push to break the militants' siege of a town in northern Iraq, while the United States carried out air strikes near the town.
But exports from Iraq's southern oil port have remained unaffected by the fighting. Russia's Gazprom Neft and Korea Gas Corp (KOGAS) said Monday they had started commercial production at the joint Iraqi Badra oilfield with initial output at 15,000 barrels per day (bpd).
In Russia, President Vladimir Putin called for talks on the "statehood" of southern and eastern Ukraine, while his Ukrainian counterpart Petro Poroshenko said his country was close to all-out war with Russia.
The escalation could result in new Western sanctions against Russia, the world's biggest oil producer, although sanctions imposed so far have not directly affected energy supplies.
Head of Russian oil major Rosneft, Igor Sechin, said Russian oil and gas companies will honour their supply contracts despite sanctions and tensions with the West.
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