Crude oil prices settled lower on Monday after a choppy day of trading, hit by slowing oil demand in China and data showing the biggest drop for U.S. retail gasoline sales in more than four years.
Positive U.S. retail sales data supported the idea that the U.S. economy was continuing to recover but it did not apply to gasoline sales, underscoring ailing demand for the fuel. The retail data also strengthened the U.S. dollar, which had a negative impact on the price of crude oil.
Refinery crude throughput in China, the world's second-largest consumer, fell 3 percent in April from March, its lowest daily rate since last September, as refineries entered maintenance season. Implied oil demand was up 3.2 percent in April from a year earlier to about 9.6 million barrels per day, the lowest in eight months.
Brent crude settled down $1.09 per barrel at $102.82, after trading as low as $102.25. U.S. oil ended the day 87 cents lower at $95.17 a barrel, after trading as low as $94.47.
"The economic data in China is not yet providing upward support. It is not that it is weak, it is simply not sufficient to support a bullish trend," Harry Tchilingurian, head of commodity market strategy at BNP Paribas, said.
U.S. retail sales edged up 0.1 percent, after a revised 0.5 percent decline in March, data from the Commerce Department showed. Economists polled by Reuters had expected retail sales to drop 0.3 percent last month.
But U.S. April gasoline sales fell 4.7 percent, the largest decline since December 2008, following March's drop of 3.2 percent, the data showed.
U.S. gasoline futures settled 1.37 percent lower at $2.821 a gallon.
The U.S. currency got a boost from the retail data. A stronger dollar weighed on crude oil prices as dollar-denominated oil becomes more expensive for holders of other currencies.
Moreover, the oil market is amply supplied as demand remains weak or uncertain.
"The strength in the dollar has taken the wind out of the market's rally," said Gene McGillian, an analyst with Tradition Energy in Stamford, Connecticut.
"We still don't see signs of any pick-up in demand. The market doesn't have the fundamental strength to move higher, it fails because we have ample supply. Demand for motor fuels is weak."
The U.S. Energy Information Administration last week said it expects world oil production to exceed consumption in the second quarter of 2013, resulting in an average build of 0.5 million barrels per day in global oil stocks.
U.S. crude oil inventories were seen rising last week beyond record inventories hit in the previous two weeks, according to a Reuters poll.
The International Energy Agency (IEA) will release its monthly and medium-term supply and demand outlook on Tuesday, after the Organization of the Petroleum Exporting Countries last week increased its outlook for 2013 demand.
The IEA "is likely to revise its forecast for non-OPEC oil supply significantly upwards to take account of the rapid growth of shale oil production in the U.S. Positive news about demand is therefore needed if oil prices are to climb," analysts at Commerzbank said.
The closely watched spread, or price differential, between global benchmark Brent crude and U.S. benchmark West Texas Intermediate narrowed to a fresh 2-1/2 year low, intraday at $7.32, settling at $7.65.
The spread has narrowed in recent weeks as crude makes its way out of the Cushing, Oklahoma, delivery point for the U.S. oil futures contract.
"However, a growing glut of crude in Houston suggests WTI-Brent is near a trough and should widen again (at least marginally) later this year," Morgan Stanley analysts said in a report on Monday. (Additional reporting by Ron Buosso in London and Robert Gibbons in New York; Editing by William Hardy, Keiron Henderson and Dale Hudson)