China said Tuesday that June imports increased 6.3 percent, which was less than analyst forecasts and down by half from May's growth rate while export growth declined to 11.3 percent from 15.3 percent in May.
Waning growth in Chinese demand for crude and other commodities suggests global oil consumption might be weaker than previously thought. Crude has fallen from $106 in May amid signs that economic growth in U.S., Europe and China is flagging.
Traders will get more insight into the health of the Chinese economy when second quarter gross domestic product is released Friday.
"The last couple of months' worth of macroeconomic headlines have fomented doubt about the prospects of robust global oil demand through the remainder of 2012," energy trader and consultant The Schork Group said in a report.
Benchmark oil for August delivery was down 98 cents at $85.01 a barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange. Crude rose $1.54 to settle at $85.99 on Monday in New York.
In London, Brent crude for August delivery was down $1.76 at $98.56 per barrel on the ICE Futures exchange.
A resolution to a labor dispute in Norway also weighed on oil prices. On Monday, the Norwegian government ordered a settlement to a disagreement over employee retirement benefits that could have forced the oil industry to prepare for a historic shutdown in the North Sea.
Norway's oil fields produce more than 3.8 million barrels of oil and natural gas per day.
Workers had been on strike since June 24, and the country's oil industry had been planning a lockout to begin at midnight Monday.
"Norway is a key contributor to the energy economy along the U.S. Atlantic seaboard," Schork said. "Therefore, the resolution of the labor dispute in Norway is significant."
In other energy trading, heating oil was down 3.5 cents at $2.71 per gallon and gasoline futures fell 3 cents to $2.73 per gallon. Natural gas gained 1 cent to $2.87 per 1,000 cubic feet.