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Brent crude futures were down $1.33, or about 1.6%, at $84.01 a
barrel at 1047 GMT. U.S. West Texas Intermediate crude was down
$1.23, or about 1.5%, at $80.71.
China's July oil imports were down 18.8% from the previous month
to the lowest daily rate since January, but still up 17% from a
year earlier.
Overall, China's imports contracted by 12.4% in July, far
steeper than the expected 5% drop. Exports fell by 14.5%,
compared with a fall of 12.5% tipped by economists.
Despite the gloomy data, some analysts were still positive on
China's fuel demand outlook for August to early October.
The peak season for construction and manufacturing activity
starts in September and gasoline consumption should benefit from
summer travel demand, said CMC Markets analyst Leon Li. Demand
is expected to decrease gradually after October, he added.
On the supply side, Saudi Arabia last week said it would extend
a voluntary oil output cut of 1 million bpd for another month to
include September, keeping the door open for further cuts by the
world's biggest oil exporter.
Russia also said it would cut oil exports by 300,000 bpd in
September.
The decision to extend cuts into September, despite Brent
futures rising above $80 per barrel, suggests Riyadh may be
targeting a higher price than $80, said Vivek Dhar, mining and
energy commodities strategist at Commonwealth Bank of Australia.
Investors are also awaiting U.S. oil and fuel products inventory
data.
"Overlapping, concentric and oppositional influences continue to
bring nervousness to our market and oil prices will have to lean
again on the state of world inventories to keep its winning
ways," said John Evans, of oil broker PVM.
(Reporting by Natalie Grover; Additional reporting by Emily Chow
and Trixie Yap; Editing by David Goodman and Louise Heavens)
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