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 Implied oil demand in China, the world's second-biggest oil
consumer, rose just 1.6 percent last year, or 150,000 bpd on the
year, according to Reuters calculations based on preliminary
government data and unrevised 2012 figures.
That compared with a forecast by the International Energy Agency of
3.8 percent growth in China's 2013 implied oil demand — a measure
based on a combination of crude oil throughput and net imports of
refined products that does not adjust for stocks changes.
"The Chinese data has contributed to negative market sentiment,"
said Carsten Fritsch, senior oil analyst at Commerzbank in
Frankfurt. "China oil demand growth is slowing."
Brent crude oil for March dropped as low as $105.81 a barrel, before
paring losses to last trade at $106.31 a barrel by 3:17 p.m. EST
(2017 GMT), down 17 cents on the day.
U.S. crude for February delivery was trading 65 cents lower at
$93.72 per barrel, after settling up 41 cents at a two-week high on
Friday.
U.S. crude volumes were low on Monday. Floor trading was shut, and
there will be no settlement on the New York Mercantile Exchange due
to the Martin Luther King Jr. Day U.S. holiday.
Oil market sentiment was influenced by news that Iran was beginning
to implement the terms of a nuclear agreement with world powers,
halting its most sensitive nuclear activity. . The White House
announced that the United States, Britain, France, Germany, Russia,
China and the European Union would follow through on their
commitment under the pact to begin lifting sanctions on Iran.
The sanctions have cut Iran's oil exports by more than half over the
past 18 months to about 1 million bpd.
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Tehran has said it will take six months after sanctions are lifted
to return to full crude oil output capacity of 4 million bpd, a
level last seen in 2011.
"The prospect of a growing oil supply is continuing to weigh on
prices," Fritsch said.
Expectations of more supply from Libya could also keep Brent prices
under pressure this week. The Libyan government said it plans to
remove protesters, who have seized eastern ports used for oil
exports, within the next few days.
The three ports, which together accounted for 600,000 barrels per
day of exports, have been occupied by heavily armed rebels since the
summer.
(Additional reporting by Jacob Gronholt-Pedersen
in Singapore; editing by Jonathan Oatis)
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