Brent crude dropped below $108 a barrel today due to weak demand from European refiners and growth in Chinese factory data.
Brent for September delivery declined 31 cents to $107.72 a barrel while US crude was down 33 cents at $102.79 a barrel, Reuters reported.
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A preliminary HSBC survey revealed that factory activity in China expanded at its fastest pace in 18 months in July, due to increase in new orders.
The data is positive for demand as China is the second-largest oil consumer in the world.
Meanwhile, there was weak demand from European refiners due to an influx of oil products from the US.
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Reuters said European refiners have been cutting runs at what should be one of the busiest times of the year, or idling plants altogether.
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By GlobalDataWest African and North Sea barrels are selling at slow pace even at bargain levels, affecting physical crude prices.
Data from the US Energy Information Administration (EIA) showed that US crude stocks fell by four million barrels last week.
Crude supply from Iraq remains unaffected by violence in the country, while the current situation in Eastern Europe and the Middle East may also affect prices.
The news agency said analysts see no sustained gains in oil prices until there is disruption in supply.
In a latest supply development, South Korea and Japan have purchased the initial condensate cargoes to be exported from the US following a 40-year ban on US crude exports.
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