U.S. oil settled nearly 2 percent on Monday on a slump in Chinese demand and worries that OPEC's decision to pump without restraint could prolong the current supply glut, although a weaker dollar limited losses.
China, the top net oil importer in the world, bought about a quarter less crude oil in May than it did in April, official data showed on Monday. In the oil products category, imports fell by more than 6 percent, against a 10 percent drop in exports.
Traders said refineries in China used more crude from stockpiles last month, leading to lower imports. A higher number of processing plants for crude were also offline for maintenance, leading to the drag on demand, some said.
But others said the 26-percent month-on-month drop in crude imports, based on May's arrival of 5.47 million barrels per day, was still an anomaly.
"A 4-6 percent drop is acceptable for refinery maintenance season in China, but 20 percent or more is a sign of demand collapse," said Bob Yawger, director of energy futures at Mizuho Securities USA.