Brent crude oil fell on Friday, tracking losses in equity markets, as concerns over the looming U.S. fiscal cliff and debt troubles in Europe weighed on prices, overshadowing better-than-expected economic data from China.
Chinese economic data for October pointed to a modest rebound in the world's second-largest oil consumer, helping to ease some worries about global oil demand growth.
But the world's top oil consumer, the United States, is at risk of tipping into recession if it fails to find a compromise to cut its deficit before nearly $600 billion worth of spending cuts and tax increases kick in early next year.
Those concerns, against a backdrop of debt troubles in the euro zone, have weighed across financial markets and led to oil swinging in about a $7 range this week, its widest since late September.
Front-month Brent was down 20 cents to $107.05 by 1425 GMT, after falling by $1 earlier in the session. U.S. crude fell 10 cents to $84.99 per barrel.
World shares are on course for their worst weekly performance since June, depressed in part by the looming "fiscal cliff" that could slash U.S. public spending.
"The pressure on the stock market is putting pressure on crude oil," said Olivier Jakob, an analyst at Petromatrix.
"The data from China overnight has been better than expected broadly... (but) it's difficult to fight against what's been going on right now for the last two days in the equity market," he said.
U.S. President Barack Obama will join the battle over the U.S. "fiscal cliff" on Friday for the first time since voters gave him a second term in office and is due to make a statement at 1805 GMT.
In addition to the fiscal cliff, investors are monitoring how the United States will tackle the issue of the debt ceiling, which needs to be raised to avoid a government shutdown.
"For the time being, the uncertainty over the fiscal cliff in the U.S. will prevent any price recovery," analysts at Commerzbank in Frankfurt said in a note.
Across the Atlantic, the European Central Bank Chairman Mario Draghi said the bank could not do much more to help near-bankrupt Greece with its problems.
Euro zone finance ministers meet on Monday in Brussels where the main topic of their discussions will be unfreezing lending to Greece, held up after Athens went way off track with promised reforms and fiscal consolidation.
World oil demand growth could fall short of forecasts next year, OPEC said on Friday, citing Europe's troubled economy and the risk of weakness in faster-growing regions such as China and India.
Positive October data from China underpinned prices on Friday, as infrastructure investment accelerated and output from the country's factories ran at its fastest in five months.
China's October exports rose more than 11 percent on a year ago and imports grew by 2.8 percent over the same period, Commerce Minister Chen Deming said.
The data offered further evidence that a cyclical recovery gained strength last month after the world's second largest economy suffered the slowest period of growth since early 2009 in the third quarter. (Additional reporting by Ramya Venugopal in Singapore; Editing by Jon Hemming)