Live updates: Follow the latest news on Israel-Gaza
Brent, the benchmark for two thirds of the world’s oil, was trading 1.19 per cent lower at $89.81 a barrel at 7.53pm UAE time while West Texas Intermediate, the gauge that tracks US crude, was down 0.95 per cent at $86.86 a barrel.
“The coming week will see energy traders continue to pay close attention to the Israel-Hamas war [and] key Chinese economic data,” said Edward Moya, senior market analyst at Oanda.
China’s third-quarter gross domestic product is expected to show the economy is “headed in the right direction”, Mr Moya said.
On Monday, the country’s central bank ramped up liquidity support to the banking system, as part of its efforts to support its economy, the world’s second largest.
The People's Bank of China conducted medium-term lending facility operations worth 789 billion yuan ($109.57 billion) to keep liquidity in the banking system adequate.
The rate on one-year policy loans was held at 2.5 per cent, unchanged from the previous operation.
China’s post-coronavirus economic recovery has lost momentum mainly due to a deepening property slump and weak consumer spending.
It has announced a string of stimulus measures, including halving stamp duty on stock transactions and easing mortgage rates.
On the supply side, traders are concerned about the Israel-Hamas war escalating into a broader regional conflict, potentially affecting crude supplies in an already tight market.
Israel is preparing for a ground offensive into Gaza and has warned about 1.1 million people in the northern half of the strip to evacuate.
Saudi Arabia and Russia have reaffirmed their combined supply cut of 1.3 million barrels per day up to the end of the year.
Meanwhile, the Opec+ alliance has enforced total production curbs of 3.66 million bpd, or about 3.7 per cent of global demand.
“The sharp sell-off in crude prices in early October has reinforced Saudi Arabia’s caution about unwinding its voluntary production cuts,” Energy Aspects said in a research note last week.
“We expect these to remain in place until year-end, as announced, and still see the potential they will be extended further into early 2024 to limit seasonal stock builds,” the data and intelligence provider said.
“We do not think Iranian oil production or exports are at risk of disruption due to the Israel-Hamas conflict.”
Last week, Opec stuck to its forecast for oil demand growth for 2023 and 2024 and said it expected the global economy to grow at a faster pace this year.
World oil demand will rise by 2.25 million bpd in 2024, compared with growth of 2.44 million bpd this year, the group said in its monthly oil market report.
However, the International Energy Agency slashed its oil demand growth forecast for next year, citing a “deteriorating economic climate”.