Oil was poised to post its biggest weekly loss in more than a month as Brent fell below $102 per barrel on Friday, pressured by ample supply and a sluggish economic recovery that could dent demand for fuel.

Crude inventories in the United States are near record levels as the world's top oil consumer produces more from shale, while shrinking factory activity in China has capped fuel demand growth in the world's No.2 user.

Improved U.S. jobs and home sales data also sparked worries that the Federal Reserve could soon scale back bond purchases and rein in the huge flow of cash that has encouraged financial investors to bet on oil amongst other assets.

Brent fell 70 cents to $101.74 by 1309 GMT, stretching its losses into a fourth session. U.S. crude fell $1.15 to $93.10 a barrel.

Both were on track for a more than 2 percent drop this week, their biggest weekly fall since the week that ended April 19.

"With the bearish fundamentals starting to gain momentum, the likelihood of oil prices falling further is becoming more likely," Dominick Chirichella of Energy Management Institute said.

"Global demand growth is still looking like it is turning to the downside."

Brent hit a three-week low on Thursday after a survey showed that China's factory activity shrank for the first time in seven months in May, stoking worries over the demand outlook for commodities.

Global oil prices peaked in the first quarter but have since fallen by more than 15 percent and are now down around a third from their all-time peak just before the financial crash in 2008.

Investors are looking for a rebound in China's economic growth in the second half of the year that could lift the outlook for fuel demand.

"We expect China's quarter-on-quarter GDP growth to accelerate in the rest of this year, although year-on-year growth could come in flat or even fall," Bank of America Merrill Lynch economists said in a note.

The oil market is also looking to the U.S. driving season, which starts this weekend, for indications on demand.

Traders have cautioned that there is more than enough gasoline to meet seasonal demand. U.S. gasoline stockpiles last week were close to the highest level for this time of the year since 1999, government data showed. (Additional reporting by Florence Tan in Sinagpore; Editing by Patrick Graham and Jane Baird)