Brent crude eased to under $110 a barrel on Monday after Chinese manufacturing data missed market expectations, signalling possibly slower demand growth in the world's second-largest oil consumer.
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China's official purchasing managers index for March came in at 50.9, the highest in 11 months, although a Reuters poll showed economists expected an increase to 52.0 from February's five-month low of 50.1.
A separate PMI survey by HSBC put the index at 51.6, mostly in line with an initial reading of 51.7, spurred by a rise in new orders.
"The data came in below market expectations, which could indicate that oil demand growth may not expand quite as quickly as we would like it to," said Carl Larry, president of Oil Outlooks and Opinion, based in Houston.
"But China's still growing and that continues to be an underlying support factor long term for the market. Whether they are at 6 percent or 7 percent, they are growing."
Brent crude for May delivery was down 51 cents at $109.51 a barrel by 0737 GMT, after slipping 1 percent in the quarter just ended. In early trade, the Brent contract hit a session high of $110.20, the loftiest since March 15.
U.S. crude was down 45 cents at $96.78 a barrel, after hitting a six-week high of $97.80 earlier in the session. West Texas Intermediate crude gained nearly 6 percent the January-March period.
The price comparisons were against Thursday's settlement prices, with trading in both markets shut on Friday ahead of the Easter holiday.
SUPPLY FLOW CONCERNS
As Exxon Mobil continued the cleanup of an oil spill in Arkansas, investor concern over the length of the supply disruption resulting from the shutdown of a pipeline is likely to support the market.
Exxon's Pegasus pipeline, which can carry more than 90,000 barrels per day (bpd) of crude from Illinois to Texas, is used to supply U.S. Gulf Coast refineries.
"The fear premium is back on again. We are definitely concerned about supply flows, with the maintenance season coming to a close," Larry said.
The spread between the WTI and Brent hit minus $12.32 earlier in the Asian trading session, the narrowest since July, likely reflecting early concerns over the impact of the Exxon Mobil pipeline shutdown.
"Furthermore, stocks at Cushing have been coming off for the past month, so the market is definitely watching to see what happens with Pegasus, because this could delay Keystone further," Larry said.
The Arkansas spill drew fast reaction from opponents of the proposed 800,000-bpd Keystone XL pipeline, which would also carry heavy crude from Canada's tar sands to the Gulf Coast refining hub.
Environmentalists have expressed concern about the impact of developing the oil sands and say the crude is more corrosive to pipelines than conventional oil.
On Wednesday, a train carrying Canadian crude derailed in Minnesota, spilling 15,000 gallons of oil. (Editing by Clarence Fernandez)