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London - Global oil prices fell Monday as traders mulled US demand worries arising from recent weak data, while ongoing violence in key crude producer Iraq failed to hit supplies.
In late afternoon London deals, Brent crude for delivery in August sank to a two-week low of $112.25 per barrel. It later stood at $112.32, down 98 cents from Friday's close.
US benchmark West Texas Intermediate for August dipped 58 cents to $105.16 a barrel, with losses capped partly by stubborn Iraq concerns.
"Crude is under pressure from disappointing US data last week as well as little new developments in Iraq," VTB Capital analyst Andrey Kryuchenkov told AFP on Monday.
The market fell sharply last week as disappointing consumer spending, jobless claims and economic growth data in the United States stoked demand jitters.
As the world's top oil consuming nation, the health of the US economy is a key influence on oil prices.
Added to the gloomy picture, American oil inventories rebounded by 1.7 million barrels in the week ending June 20. That dashed expectations for a 1.2-million-barrel decline, indicating poor demand.
Traders are therefore eagerly awaiting crucial data this week, including the latest weekly inventories on Wednesday and non-farm payrolls (NFP) on Thursday.
"To some degree, the inventories build is still weighing on prices," added Forex.com oil analyst Fawad Razaqzada.
"But currently crude oil is little changed as the market awaits fresh data from the US this week, with the situation in Iraq preventing prices from falling below $105.
"This is a very important technical level and if the data (inventories and NFP) disappoints expectations then we could see a breakdown and move towards $103."
Jihadists spearheading a Sunni militant offensive in Iraq have declared an "Islamic caliphate" straddling Syria and Iraq.
However, unrest in Opec's second biggest exporter has failed to spread to the nation's key crude-producing southern region, and has therefore sent oil prices sliding from recent nine-month peaks.
Iraqi forces pressed a counter-offensive Monday against Tikrit, one of a string of towns and cities overrun in a swift advance that has left more than 1,000 people dead, displaced hundreds of thousands and piled pressure on Prime Minister Nuri al-Maliki.
The Islamic State of Iraq and the Levant renamed itself the Islamic State (IS) and declared its shadowy frontman the leader of the world's Muslims, in a clear challenge to Al-Qaeda for control of the global jihadist movement.
IS announced on Sunday that it was establishing a "caliphate" - an Islamic form of government last seen under the Ottoman Empire - extending now from Aleppo in northern Syria to Diyala province in eastern Iraq.
Earlier this month, oil prices had struck nine-month peaks on fears that violence would slash Iraqi crude production, but they have since fallen as supply fears faded.
French bank BNP Paribas has raised its average oil price forecasts for 2014 and 2015 by 4.0% to 6.0% because of the developments in the Middle East.
"Geopolitics in the Middle East has recently introduced concerns about supply disruptions and, consequently, led to a sharp increase in global crude oil prices," it said.
While actual supply has not been interrupted, "the possibility of uncertainties persisting and pushing up the price higher cannot be ignored", it warned.
The crisis has rocked the global oil market because Iraq is the second-biggest producer within the 12-nation Organization of Petroleum Exporting Countries (Opec).
Iraq has more than 11% of the world's proven resources and produces 3.4 million barrels a day.
