THE PRICE of crude oil slipped towards $107 a barrel on Monday, weighed down by concerns over demand growth, although a weak dollar and fears about supply disruptions kept losses in check.
Investors have been rattled by the slowdown in China, where manufacturing output has stalled in recent months, and are awaiting more economic data to help gauge the demand outlook.
Brent crude slipped 12 cents to $107.05 a barrel by 0740 GMT, after ending 48 cents lower on Friday and sliding for a second straight week. U.S. oil fell 50 cents to $104.20 a barrel after settling 79 cents down in the previous session.
"There is potential for a further correction lower, particularly after a rise in speculative long positions."
Hedge funds took huge positive bets on U.S. crude last week just before the market turned south. Positive wagers by money managers on U.S. crude reached a record high for the week ended July 23, data from the Commodity Futures Trading Commission showed.
A weaker dollar helped support oil.
The U.S. currency slumped to a one-month low against the yen on Monday, reflecting expectations that the Federal Reserve will offer forward guidance on Wednesday that it intends to keep interest rates low for some time.
Oil was also bolstered by supply worries.
The North Sea's Forties pipeline has cut pumping rates by about 40,000 barrels per day (bpd) because of maintenance, trade sources said, tightening supply of the crude that underpins the Brent benchmark.