LONDON: Brent crude oil fell towards $97 a barrel on Tuesday, pressured by weak economic data from the world's two biggest energy consumers which pointed to weak demand growth at a time of strong supply.
November Brent was down 37 cents to $97.51 a barrel by 0810 GMT. The October contract which expired on Monday dipped to a 26-month low at $96.21 in its final session.
Brent is down 13.1 percent in the third quarter, its biggest such drop since the second quarter of 2012.
U.S. crude for October delivery fell 35 cents to $92.57 a barrel.
Growing supply from Libya, where output has increased to nearly 1 million barrels per day, has coincided with weaker-than-expected economic data from China and the United States.
"Production is increasing and there are no visible shortages of oil," said Olivier Jakob, at oil analyst Petromatrix in Zug, Switzerland.
"The IEA revised demand lower, China is not pulling and the European economy is at risk of sanctions and counter-sanctions (between Russia and Western powers)."
China's August factory output grew at its weakest pace in nearly six years, raising fears of a hard landing for the world's second largest economy.
U.S. manufacturing data was also negative as output fell for the first time in seven months in August.
OECD energy watchdog International Energy Agency (IEA) last week revised down its global oil demand growth projections for 2014 and 2015.
STOCKS WATCH
However, the U.S. crude price may gain some support from an expected fall in U.S. commercial crude oil and gasoline stockpiles last week.
Crude stocks fell 1.8 million barrels on average last week, according to a preliminary Reuters survey of six analysts conducted ahead of weekly inventory reports from industry group American Petroleum Institute (API) and the U.S. Department of Energy's Energy Information Administration (EIA).
Russia is also expected to cut exports of seaborne Russian Urals and ESPO crude oil blends by 6.2 percent to 50.17 million tonnes in the last three months of the year from the previous quarter.
Russian Energy Minister Alexander Novak will meet OPEC officials on Tuesday in Vienna, his spokeswoman said.
Looking ahead, investors are eyeing minutes from a two-day Federal Open Market Committee (FOMC) meeting that ends on Wednesday which may provide cues on when it would raise interest rates and how much further the dollar could strengthen and impact commodities prices.
A stronger greenback makes dollar-denominated commodities more expensive for holders of other currencies, generally pushing the price lower.
A referendum on Scottish independence on Thursday will also be closely watched. Scotland extracts much of the North Sea oil, which forms the basis of the Brent crude oil benchmark.
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