Initial jobless claims rose to the highest level in four months last week, a third straight rise, indicating that the labor market recovery in the world's largest oil consumer slowed in March. Meanwhile, North Korea warned that its military has been cleared to wage an attack on the U.S. using "smaller, lighter and diversified nuclear" weapons.
Light, sweet crude for May delivery was down $1.30 at $93.14 a barrel, having fallen to $92.12, the lowest intraday price since March. Brent crude futures were down $1.25 to $105.86 a barrel, having earlier touched a low of $105.29, the lowest since early November.
(Read More: Brent Bounces Off Five Month Low After US Data)
Still, professional trader Jim Iuorio isn't ready to call it a buying opportunity.
"This move is so decisive over the last couple days and It's dependent on so many factors that all point to negative oil," Iuorio said, citing weak employment data as an example. "To me, it seems like crude could have more downside."
At the same time, Iuorio doesn't recommend selling oil at current levels. Before dumping out of a position, he suggests waiting for it to get back to the $93.90 level. In the meantime, he plans to sell the May crude oil futures contract at $93.90 with a target of $92 and a stop at $94.90.
(Read More: 10 Things You Need to Know to Trade Futures)
From a technical perspective, Jeff Kilburg of KKM Financial said, crude oil could fall much lower if it breaks the key technical level of $89 a barrel. He thinks it could even drop to the $85 level in the short term, especially because economies worldwide appear to be slowing.
Both Iuorio and Kilburg agreed that decreased demand will also serve as a headwind for oil. More Americans are driving fuel-efficient automobiles, meaning less demand for fuel. During the Great Recession, consumers avoided buying new cars. When today's drivers are forced to make a new purchase, however, they're going for cars that use less gas.
"Even if you're not into the electrical car situation, you have to rethink, 'What are we doing buying gas?' " Kilburg said. "So I think the demand destruction is making everyone rethink [the oil markets] this week."
Read on for Drivers, Rejoice! Expect Big Drop in Gas Prices
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