The World Bank cut its economic growth forecasts for East Asia and the Pacific region, home to two of the world’s largest oil consumers, earlier in the day saying there was a risk the slowdown in China could be deeper and more prolonged than expected.
China has been a prop for the world economy and global energy demand at a time of slower growth or recession for many developed nations.
Concerns about Europe persisted, with a fall in industrial orders for Germany, the region’s largest economy, while a firm dollar after a surprise drop in the US jobless rate also curbed oil prices.
A stronger dollar makes commodities priced in the US currency more expensive for many end-consumers.
Brent crude for November fell to a low of $110.54, down $1.48, before recovering to around $111.86 by 1405 GMT.
US crude fell $1.67 to a low of $88.21 but then rallied to around $89.38, down 50 cents.
“The situation in China remains fairly uncertain as the World Bank cut its growth forecast for East Asia, raising serious concerns about a slowdown in global oil demand,” said Myrto Sokou, a senior research analyst at Sucden Financial.
The World Bank said the new forecasts marked the slowest growth rate in the Asia Pacific region since 2001, even slower than the peak of the financial crisis in 2009.
“It’s probably China that holds the keys to all this,” said Christopher Bellew, a broker at Jefferies Bache. “This certainly could have caused the retrace downwards today.”
Oil continued to draw support from worries about potential threats to supply as the Syrian civil conflict drags on and as Iran’s dispute with the West over its nuclear programme persists.