U.S. oil futures fell to their lowest level in 2013 on Monday, declining for a third consecutive session in reaction to slowing growth in China and indicators that oil markets are amply supplied.
Brent crude fell for a fifth straight session, reversing slight gains earlier that traders had attributed to oil supply disruptions in Libya and in Europe's North Sea region.
U.S. crude for April delivery fell 56 cents to settle at $90.12 a barrel, after falling below $90 a barrel earlier for the first time since December. U.S. crude has fallen around $8 per barrel over the last month.
Brent fell 31 cents to settle at $110.09.
Over the weekend, China reported that its services sector expanded at the slowest pace in five months in February, and factory growth also cooled to multi-month lows.
In the United States, automatic government spending cuts, known as the "sequester," were triggered on Friday as lawmakers failed to agree on a resolution to prevent them.
According to the International Monetary Fund, the U.S. spending cuts could cost the world's biggest oil consumer about 0.5 percent of its economic growth, a factor that could weigh on global oil demand.
Concerns over the prospects of the euro zone's recovery were highlighted as the region's sentiment tumbled in March, breaking a six-month trend of gains.
"Economic sentiment has shifted, and we're also seeing the first stages of long liquidation in the oil market. Money managers had increased their exposure (to oil) a lot over a ten week period," said energy analyst Tim Evans at Citi Futures in New York.
"They are now recognizing that we don't have physical demand to justify higher price levels."
In the United States, total oil inventories are up 9 percent from year-ago levels and domestic oil and liquids production has risen by around one-fifth due largely to a boom in shale drilling, Evans added, citing the most recent data from the U.S. Energy Information Administration.
The agency also reported last week that U.S. oil demand in 2012 was the lowest since 1996.
The changing supply-demand dynamics in the United States help to minimize the oil price impact from supply disruptions elsewhere.
The 80,000 barrel-per-day (bpd) UK Brent pipeline was shut on Saturday for the second time in seven weeks after a leak was found at the Cormorant Alpha platform in the North Sea.
The operator of the 10,000 bpd platform said on Monday it was still unclear when the pipeline system would reopen. Total halted all its oil exports from the North Sea area due to the shutdown.
A venture between Libya's national oil company and Italy's ENI was forced to curb oil output at the its Elephant and Wafa fields by 25 percent following weekend clashes.
That could be extended to 50 percent from its regular output of 210,000 barrels per day, the venture's chairman said.
Crude output from the 12-member Organization of the Petroleum Exporting Countries (OPEC) rose to 30.32 million barrels per day in February from 30.21 million in January, the first climb since October, a Reuters survey showed. (Reporting by Joshua Schneyer and Cezary Podkul in New York. Additional reporting by Ron Bousso and Ramya Vanygopal. Editing by Bob Burgdorfer)