Crude futures on both sides of the Atlantic lost ground on Friday, settling lower as rising fuel supplies and a stronger dollar put oil under pressure.
"The higher dollar is putting on pressure - there's a lot of volatility in currencies and there is no strong underlying demand for oil," said Olivier Jakob of Petromatrix in Zug, Switzerland.
By late trading, oil had pared most of the day's losses, yet was still mired in the red. Brent crude futures settled down 56 cents at $103.91. U.S. light, sweet crude eased 35 cents to settle at $96.04 a barrel.
Stockpiles of U.S. crude hit another record level last week due to growing domestic production.
And production from the Organization of the Petroleum Exporting Countries rose by 280,000 barrels per day (bpd) in April to 30.46 million bpd, according to secondary sources cited in the group's monthly report.
Investors had grown more confident after the number of Americans filing new claims for jobless aid fell last week to its lowest in more than 5 years, underlining resilience flagged earlier by a strong April employment report.
But doubts persisted about the health of the world's No. 2 economy, China. While consumer inflation rose in April, China's factory prices fell for a 14th straight month.
In the first quarter, China's gross domestic product grew by a less than forecast 7.7 percent, frustrating investors who had hoped for a strong rebound of at least 8 percent.
"...with U.S. crude oil production and inventories both at multi-decade highs, it's a big stretch to call the physical fundamentals supportive," said Citi Futures Perspective analyst Tim Evans in a report.
The value of commodities like oil, priced in U.S. dollars, tend to drop when the dollar becomes stronger.
The spread between Brent and WTI crude oil has widened out in the last two days and was trading at $8.14 after hitting its narrowest point in more than two years on Wednesday, settling at $7.72.
Goldman Sachs in a report said it expects the spread to narrow further to as low as $5 in the third quarter as several pipeline projects come online to allow more production to reach U.S. Gulf Coast refineries.