Oil prices fell by more than $1 a barrel, losing over 1.5% in early trading on Monday, after disappointing Chinese inflation data and a lack of clarity on Beijing's economic stimulus plans stoked fears about demand.
Brent crude futures were down $1.26, or 1.59%, at $77.78 per barrel by 0020 GMT, and U.S. West Texas Intermediate crude futures fell $1.20, or 1.59%, to $74.36 per barrel.
The negative news from China outweighed market concerns over the lingering possibility an Israeli response to Iran's Oct. 1 missile attack could disrupt oil production, though the U.S. has cautioned Israel against targeting Iranian energy infrastructure.
China's deflationary pressures worsened in September, according to official data released on Saturday, and a press conference the same day left investors guessing about the overall size of a stimulus package to revive the sputtering economy.
The consumer price index rose 0.4%, the data showed, missing expectations, and the producer price index fell at the fastest pace in six months, down 2.8% year-on-year, according to the National Bureau of Statistics.
"Saturday's briefing by the China Ministry of Finance has turned out to be a flop. The fiscal measures needed to remove downside risks to growth and ignite the animal spirits within Chinese consumers (are) conspicuous in their absence," IG market analyst Tony Sycamore said in a note.
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