Oil fell below $70 a barrel on Tuesday, mirroring weaker equity markets, and dragged by data showing Britain's manufacturing sector dipped unexpectedly in August.
Traders were awaiting the release of a gauge of U.S. manufacturing activity in August and weekly crude inventory data later on Tuesday, which were expected to show a rebound in the U.S. economy and oil consumption.
Global stocks <.MIWD00000PUS> eased after economic data in China failed to erase concern among equities investors over the durability of this year's share market rally.
By 1124 GMT (7:24 a.m. EDT), U.S. crude for October delivery was down 15 cents at $69.81 a barrel. London Brent crude was up 12 cents to $69.77.
I don't see a strong recovery in the oil price, said Eugen Weinberg, analyst at Commerzbank.
The risk factors ... freight rates, a weak stock market, possibly also a stronger dollar and weak equity markets in Europe today indicate prices are likely to fall.
China's official purchasing managers' index (PMI) for August reached a 16-month high, according to surveys on Tuesday.
The data helped crude rise to an intra-day high of $70.64 as the market recovered from a 4 percent fall on Monday in response to worries about Chinese curbs to lending.
Oil traders will look for fresh direction to the next sets of data on the world's biggest energy market, the United States.
The Institute for Supply Management's manufacturing gauge will be released at 1400 GMT (10:00 a.m. EDT) and is expected to be in positive territory for the first time since the recession began, a Reuters poll of economists showed.
Then at 2030 GMT (4:30 a.m. EDT), weekly oil inventory data from the American Petroleum Institute (API) is expected to show a 400,000 barrel fall in U.S. crude stocks following an increase in refinery utilization, a preliminary Reuters poll of analysts showed.
The industry data will be followed on Wednesday by figures from the U.S. government's Energy Information Administration (EIA).
Adding to already high inventories, OPEC has reduced its compliance with agreed production curbs, a Reuters survey on Tuesday found.
OPEC supply in August rose for a fourth consecutive month as Saudi Arabia, Nigeria and Venezuela increased their production, taking overall output discipline to 68 percent from a revised 70 percent in July.
The Organization of the Petroleum Exporting Countries meets on September 9 in Vienna to reconsider its output policy.
(Additional reporting by Jennifer Tan in Singapore; editing by Keiron Henderson)