Crude oil prices fell on both sides of the Atlantic on Monday, hit by slowing oil demand in China and data showing the biggest drop for U.S. retail gasoline sales in more than four years.
Refinery crude throughput in China, the world's second-largest consumer, fell 3 percent in April from March, its lowest daily rate since last September, as refineries entered maintenance season. Implied oil demand was up 3.2 percent in April from a year earlier to about 9.6 million barrels per day, the lowest in eight months.
"The economic data in China is not yet providing upward support. It is not that it is weak, it is simply not sufficient to support a bullish trend," Harry Tchilingurian, head of commodity market strategy at BNP Paribas, said.
The dollar's recent strengthening, which makes oil more expensive for holders of other currencies, also kept a lid on prices.
While government data showed an overall unexpected rise in U.S. retail sales in April, gasoline posted a sharp drop, weighing on oil prices.
U.S. April gasoline sales fell 4.7 percent, the largest decline since December 2008, following March's loss of 3.2 percent, data from the U.S. Commerce Department showed.
U.S. gasoline futures were trading less than 1 percent lower around $2.83 a gallon, after falling as much as 1.5 percent.
The Commerce Department said retail sales edged up 0.1 percent, after a revised 0.5 percent decline in March. Economists polled by Reuters had expected retail sales to drop 0.3 percent last month.
The U.S. currency got a boost from the retail data, making dollar-denominated oil more expensive for holders of other currencies and weighing on crude prices.
Moreover, the oil market is amply supplied as demand remains weak or uncertain.
"The strength in the dollar has taken the wind out of the market's rally," said Gene McGillian, an analyst with Tradition Energy in Stamford, Connecticut.
"We still don't see signs of any pick-up in demand. The market doesn't have the fundamental strength to move higher, it fails because we have ample supply. Demand for motor fuels is weak."
The U.S. Energy Information Administration last week said it expects world oil production to exceed consumption in the second quarter of 2013, resulting in an average build of 0.5 million barrels per day in global oil stocks.
The International Energy Agency (IEA) will release its monthly and medium-term supply and demand outlook on Tuesday, after the Organization of the Petroleum Exporting Countries last week increased its outlook for 2013 demand.
The IEA "is likely to revise its forecast for non-OPEC oil supply significantly upwards to take account of the rapid growth of shale oil production in the U.S. Positive news about demand is therefore needed if oil prices are to climb," analysts at Commerzbank said.
The closely watched spread, or price differential, between global benchmark Brent crude and U.S. benchmark West Texas Intermediate was trading around $7.89.
The spread has narrowed in recent weeks as crude makes its way out of the Cushing, Oklahoma delivery point for the U.S. oil futures contract.
"However, a growing glut of crude in Houston suggests WTI-Brent is near a trough and should widen again (at least marginally) later this year," Morgan Stanley analysts said in a report on Monday.