LONDON: Brent crude oil fell below $97 a barrel on Monday, moving closer to a two-year low hit last week as weak data from major buyer China and a stronger U.S. dollar added to pressure from strong supplies.
The international oil benchmark has fallen from $115 in June as geopolitical tension in the Middle East failed to derail petroleum output, while concerns about slow demand have grown.
Brent for November delivery fell 61 cents to $96.39 a barrel by 0757 GMT. Front-month prices fell to an intraday low of $95.60 on Sept. 24, the lowest since July 2012.
U.S. crude dropped 72 cents to $92.82 a barrel after jumping just over $1 on Friday on the back of strong U.S. economic data.
Its discount to Brent narrowed to the smallest in 12 months on Friday, touching $3.21 a barrel, before widening to $3.57 on Monday.
"The Chinese data over the weekend was bearish for demand and the WTI jump on Friday led to profit-taking today," said Ken Hasegawa, a commodity sales manager at Newedge Japan.
Chinese industrial profits fell 0.6 percent in August from a year earlier, reversing from July's 13.5 percent rise, the government said on Saturday, adding to problems such as unsteady exports, a housing downturn and cooling investment growth in the world's No.2 economy.
But China's manufacturing sector may have steadied in September as factory orders held up, according to a Reuters poll.
The dollar hit a fresh four-year peak against a basket of currencies on Monday and that also weighed on petroleum since it makes products priced in the greenback expensive for buyers using other currencies.
The firmer dollar hit other commodities, too, causing spot gold to hang around a nine-month low and copper futures to slip to their lowest in more than three months.
Iran has urged OPEC members to make coordinated efforts to help stem the decline in oil, but that has highlighted a split with others in the oil producers' group such as Saudi Arabia who are playing down the price drop.
Over the weekend, air raids carried out by U.S.-led forces hit three makeshift oil refineries in northern Syria as part of a campaign against Islamic State, a human rights group said.
"(Middle East) supply disruption hasn't happened (so oil traders) have no reason to hold long positions and they are liquidating positions to take profits," said Tetsu Emori, commodity fund manager at Japan's Astmax Investment.
Providing some support, a strike has trimmed Libya's oil output by 25,000 barrels a day to 900,000 bpd, a spokesman for state-run National Oil Corp (NOC) said on Sunday, but production is still up from a low of 200,000 bpd earlier in the year.
Libya's elected parliament will hold its first talks on Monday with members from an opposing city linked to a rival assembly, lawmakers said, starting a badly needed dialogue as the country teeters on the edge of collapse.
Strength in U.S. gasoline futures has also helped underpin oil prices, as a slate of refinery maintenance shutdowns have seen prices jump by around 6 percent in the last two weeks.
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