Oil fell to around $112 a barrel on Friday as a slowdown in China's trade flows and weaker forecasts from the International Energy Agency added to concern about demand, offsetting hopes of stimulus measures aimed at lifting global growth.
Data from the second-largest oil consumer, China, showed July exports rose just 1 percent from a year ago, suggesting pro-growth policies have been slow to gain traction and that more urgent action may be needed.
Brent crude for September delivery was down $1.25 to $111.97 by 1352 GMT, having traded as low as $111.31 earlier in the session. U.S. crude was down $1.22 to $92.14.
"The Chinese exports data was rather disappointing, so we are having a bit of a sell-off in response," said Christopher Bellew, an oil broker at Jefferies Bache in London.
Underscoring a weaker oil demand picture, the Paris-based IEA, which advises 28 industrialised countries, reduced its estimate for global oil demand growth in 2013 by 150,000 barrels per day in a monthly report.
"Lower economic growth is feeding through to slower oil demand all round," David Fyfe, head of the IEA's markets division, told Reuters. "Global inventories have risen, and the oil market looks comfortably supplied."
So far on Friday, Brent's downward move has been checked by an important level of technical support, the 200-day moving average at $111.32. Should that be breached, the next notable level is $110, said Olivier Jakob, analyst at Petromatrix.
Oil is still set to rise for a second week, supported by improved jobs data in No. 1 oil user the United States, supply concerns and optimism about the prospects for monetary easing policies in the euro zone and China.
"The weakness in China's economic data leaves the door open for further rate cuts by the central bank that could kick start the economy again," said Tim Waterer, a senior trader at CMC Markets in Sydney.
The cut in the IEA's 2013 oil demand growth forecast came a day after producer group OPEC said it might have to reduce its own oil demand growth estimate for next year by 20 percent due to a weak economic outlook.
A drop in North Sea output due to a period of oilfield maintenance and tension in the Middle East are supporting Brent, widening its premium to U.S. crude to nearly $20 a barrel, the most since mid-May.
North Sea crude underpins the Brent contract, which is used to price oil in the Middle East, Europe, Africa and Asia. North Sea supply is set to plunge 17 percent in September, adding to signs of a shortage that may artificially lift Brent.
On the weather front, traders were watching out for any signs of disruption to oil and gas installations in the Gulf of Mexico due to the hurricane season, which runs until the end of November.
Tropical Storm Ernesto weakened as it travelled inland from the Gulf on Thursday, but it sent wind gusts and showers across the state of Veracruz, home to some of Mexico's busiest ports and oil installations. (Additional reporting by Florence Tan; Editing by Anthony Barker and Jane Baird)