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Brent crude futures dropped $1.17, or 1.2%, to $94.60 a barrel
by 0900 GMT, extending Friday's 1.2% decline.
U.S. West Texas Intermediate (WTI) crude was down $1.25, or
1.4%, at $86.65 after losing 1.3% on Friday.
Both benchmarks, however, are on track for their first monthly
gains since May.
Factory activity in China, the world's largest crude importer,
fell unexpectedly in October, an official survey showed on
Monday, weighed down by softening global demand and strict
COVID-19 restrictions that hit production.
"The purchasing managers' index (PMI) data contracting adds to
the post-China congress party blues for oil markets. It is not
difficult to draw a straight line from weaker PMIs to China's
COVID-zero policy," said Stephen Innes, managing partner of SPI
Asset Management.
"So long as COVID-zero remains entrenched, it will continue to
thwart oil bulls."
Chinese cities are stepping up zero-COVID curbs as outbreaks
widen, dampening hopes of a rebound in demand.
Strict COVID-19 curbs in China have hit economic and business
activity, curtailing oil demand. China's crude oil imports for
the first three quarters of the year fell 4.3% year on year for
the first annual decline for the period since at least 2014.
Meanwhile, the euro zone is likely to be entering recession,
with its October business activity contracting at the fastest in
nearly two years, a S&P Global survey said, as rising costs of
living keeps consumers cautious and hurts demand.
European Central Bank policymakers are also standing behind
plans to keep raising interest rates, even if it pushes the bloc
into recession and stirs political resentment.
In an outlook to be released on Monday, the Organization of the
Petroleum Exporting Countries is expected to stick to a view of
oil demand rising for another decade despite increasing use of
renewable energy and electric cars, two OPEC sources said.
(Reporting by Noah BrowningAdditional reporting by Florence Tan
and Emily ChowEditing by David Goodman)
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