* China's economic activity slows down, data shows
* China's implied oil demand edges up 1 percent
* EIA raises tenfold estimates of shale oil global reserves
* IEA, OPEC, EIA to release oil demand reports this week
(Adds NEW YORK dateline, details, new quote. Updates prices.)
By Jeanine Prezioso and Ron Bousso
NEW YORK/LONDON, June 10 Oil pared losses on
Monday but was still trading lower as the dollar slid off its
session high and as weak data in top oil consumer China muddied
the demand outlook.
Brent oil was trading 36 cents lower at $104.20 a
barrel at 11:33 a.m. EDT (1533 GMT), after climbing to $104.76
earlier and trading as low as $103.73. U.S. oil was
trading 14 cents lower at $95.89 per barrel, after trading
between $95.19 and $96.25.
The U.S. dollar strengthened early in the session on news
that ratings agency Standard & Poor's upgraded the credit
outlook for the U.S. government. It then pared gains after a top
Federal Reserve official said that low U.S. inflation means the
government would continue its massive bond buying program.
Oil prices tend to move in the opposite direction to the
dollar. Commodities traded in the U.S. greenback become more
expensive in other currencies as it rises and cheaper as it
falls, generally bringing more buyers into the market, analysts
China's economy is losing momentum, with May exports and
domestic activity struggling to pick up.
Refinery production dropped to a nine-month low and implied
oil demand in the world's number two oil consumer in May rose at
its lowest rate since September 2012, compared with the
year-earlier month, according to Reuters calculations.
U.S. oil prices rose to a two-week high on Friday after a
jobs data report showed a slight improvement in hiring. Trading
volumes on Friday in the U.S. front-month crude oil contract
were at their highest level since November 2012, according to
That one piece of positive data was not enough to continue a
rally into Monday as overall global economic data remain weak to
neutral, analysts said.
"We're pivoting around $94," said Gene McGillian, an analyst
with Tradition Energy in Stamford, Connecticut. "We can get a
couple of dollar swings without a clear direction of where the
market is going. If we get up to $98 we'll find out if we really
do have a rally on our hands."
U.S. stockpiles of crude and production are at or near
record highs. OPEC and the International Energy Agency (IEA)
will release their monthly global oil demand reports on Tuesday,
with the U.S. Energy Information Administration (EIA) to follow
The EIA estimated that global reserves of shale oil that can
be drilled with today's technology have shot up 10 times higher
compared to an estimate from two years ago.
Still, speculative money continues to enter the market.
Speculators raised their net long positions in Brent crude oil
futures in the week to June 4 to their highest level in more
than three months.
Prices drew some support from concerns about Sudan cutting
oil exports from South Sudan.
(Additional reporting by Manash Goswami, Aardon Sheldrick and
Rebekah Kebede; editing by James Jukwey and Andrew Hay)