Brent crude oil sank to an eight-month low under $103 a barrel on Friday as the outlook for global oil demand growth dimmed, although an improvement in U.S. jobs data put a floor under prices.
The International Energy Agency (IEA) on Thursday trimmed its 2013 global oil demand growth estimate, following similar moves by the U.S. Energy Information Administration (EIA) and the Organization of the Petroleum Exporting Countries (OPEC).
Brent crude lost $1.40 to trade at $102.87 a barrel by 1153 GMT, after reaching as low as $102.76. U.S. oil shed $1.19 to $92.32.
"There will be little scope for the oil price to recover for as long as demand prospects remain gloomy," said Carsten Fritsch, senior oil analyst at Commerzbank.
Oil drew some support from data showing a drop in the number of Americans filing for new unemployment benefits last week, which helped ease fears of a deterioration in labour market conditions after a surprise stumble in job growth in March.
SOFTER DEMAND OUTLOOK
World oil use will rise by 795,000 barrels per day (bpd) this year, the Paris-based IEA said in its monthly report. That is 25,000 bpd less than it estimated last month and a third straight monthly cut.
The IEA now has virtually the same view on demand as OPEC, which in a report on Wednesday lowered its consumption growth forecast to 800,000 bpd. The EIA on Tuesday lowered its estimate by 50,000 bpd to 960,000 bpd.
On supply, the IEA also lowered its forecast for countries outside OPEC this year for the first time in several months and said worsening security in Libya and oil theft in Nigeria had contributed to a decline in OPEC output last month.
Markets were also watching developments in north Asia after a U.S. government agency said North Korea has a nuclear weapon it can mount on a missile, adding an ominous dimension to threats of war by Pyongyang, but the assessment was swiftly dismissed by several U.S. officials and South Korea. (Additional reporting by Manash Gaswami in Singapore; editing by Jane Baird and Keiron Henderson)