Oil prices retreated more than 2 percent on Tuesday after Norway's government ordered an end to an oil workers' strike and data showed China imported less crude oil in June than the previous month.
Brent crude dropped back under $100 a barrel after Norway's government late on Monday ordered a settlement in a dispute between striking oil workers and employers. The deal prevented the cut off of more than 2 million barrels per day (bpd) of crude oil, natural gas liquids and condensate.
Citing potential economic consequences, Oslo intervened with the strike in its third week and minutes before an industry-imposed lockout. Norwegian law allows the government to force workers back on the job.
"The intervention (by the Norwegian government) means that a major supply disruption is prevented," Oliver Jakob, managing director at consultancy Petromatrix, wrote in a note.
China's crude imports in June sagged to 5.29 million bpd, the lowest daily rate this year and 12 percent lower than the record 6.0 million bpd in May, reinforcing concerns about slowing demand for oil.
Brent August crude fell $2.35 to settle at $97.97 a barrel, not far above a $97.73 intraday low.
U.S. August crude tumbled $2.08 to settle at $83.91 a barrel, having fallen as low as $83.65.
Brent's premium to U.S. crude <CL-LCO1=R> fell to $14.06 based on settlements. The spread narrowed to $13.32 intraday.
Brent's total crude trading volume outpaced U.S. dealings by about 200,000 lots as U.S. crude turnover substantially lagged its 30-day average.
Norway avoiding a prolonged and complete production halt, "is not only pressuring oil prices today but is also bearish for the Brent/WTI spread ...," Dominick Chirichella, senior partner at Energy Management Institute in New York, said in a note.
"With the Norwegian oil strike out of the way and the possibility that progress will be made with Iran the normalization of the Brent/WTI spread should get back on track over the next week or so," Chirichella added.
Iran's Foreign Minister Ali Akbar Salehi on Monday downplayed threats by Iranian officials in recent months to block the Strait of Hormuz, the region's vital oil shipping lane. Salehi said Iran was ready to talk about halting 20 percent uranium enrichment if its needs for fuel were fully met.
Tough U.S.-led sanctions and a European Union (EU) embargo are forcing Iran to shut off wells, reducing production to levels last seen more than two decades ago.
Senior diplomats from the EU and Iran will meet on July 24 for technical talks on Tehran's disputed nuclear program to try to salvage diplomatic efforts to resolve the standoff that has added a geopolitical fear premium to oil prices.