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World oil prices drifted lower on Wednesday after weak manufacturing data in China, and before the latest update on energy reserves in the United States.
Brent North Sea crude for delivery in September fell 69 cents to stand at $107.73 a barrel approaching midday in London.
New York's main contract, West Texas Intermediate (WTI) for delivery in September, slid 15 cents to $107.08 a barrel.
Global banking giant HSBC said its preliminary purchasing managers index (PMI) for China hit an 11-month low of 47.7 for July, down from 48.2 in June.
A reading above 50 indicates growth and anything below points to contraction. Its final reading will be released at the start of next month.
"The negative Chinese PMI data is having a dampening effect on oil prices," Jason Hughes, head of sales trading at CMC Markets in Singapore, told AFP.
"Traders will also be closely watching out for PMI data from Europe and elsewhere for clues about global demand," he said.
The result is the latest in a string of data suggesting previous double-digit growth rates in the world's top energy consumer are a thing of the past as Beijing looks to shift its income source from exports to domestic consumption.
Investors will now look to the release of the weekly US crude stockpiles by the Department of Energy later Wednesday.
A survey by the American Petroleum Institute showed supplies fell 1.44 million in the week to July 19, signalling robust demand as Americans take to the roads for their holidays.