Oil prices eased on Wednesday as weak economic data in Europe and the United States hit the outlook for demand.
Brent crude for June slipped 60 cents to $119.06 a barrel by 1314 GMT, after settling 19 cents higher at $119.66 on Tuesday. U.S. crude for June was down 41 cents at $105.75.
The Euro Zone's manufacturing sector slipped further into decline last month as a downturn that started in the periphery appeared to be taking root among core members France and Germany, a survey showed on Wednesday.
Germany's manufacturing sector shrank at the fastest pace in nearly three years in April, and manufacturing activity in France, Italy and Greece also retreated while unemployment in Germany and France rose.
"It does feel a bit like we are in a negative death spiral," said Bjarne Schieldrop, chief commodity strategist at SEB in Oslo. "Austerity measures over an extended period are showing up in disappointing economic activity."
Data in the United States also painted a more negative picture a day after strong manufacturing numbers, with U.S. private employers adding far fewer jobs than expected.
In the United States, crude oil stocks rose by 2 million barrels last week, the industry group American Petroleum Institute (API) said, less than expected.
Ahead of weekly inventory reports, a rise of 2.5 million barrels for crude, a sixth consecutive build, was forecast in a Reuters survey of analysts.
Oil remains well below the highs above $126 per barrel seen in March, and the relatively small upward move on Tuesday after strong U.S. data highlighted the overall bearish tone, Schieldrop said.
"It seems like we are more sensitive to downside news, as even when there was stronger data from the United States, there was not much of a reaction in the Brent market," he said. SEB has a forecast of $115 per barrel for the third quarter.
While Europe was the main concern of investors, and Wednesday's U.S. data added to the negative tone, lingering worries about the outlook for China, also helped to pressure prices.
"China is a concern, with new loans falling sharply last month. The question is whether the government's easing measures have come in time for a soft landing," said Gordon Kwan, head of energy research at Mirae Asset Management in Hong Kong.
Chinese bank lending is estimated to have dropped 30 percent in April from a month earlier as demand for credit declined, the official China Securities Journal reported on Wednesday.
Fears about disruption to supply from Iran have eased somewhat in recent weeks, with more conciliatory words coming from Jerusalem and Tehran, which has also helped to keep prices off recent highs.
Iran said it was seeking an end to Western sanctions over its arms programme during talks with world powers and criticised France for helping Israel, the only country in the Middle East widely believed to have atomic weapons.
Even if there were to be further disruption from sanctions on Iran, action by other oil producers and possible inventory releases will mute impact on the oil price, Schieldrop at SEB said.
"Saudi Arabia can pump more oil, and we are seeing increased production from Iraq and Libya," he said. (Additional reporting by Francis Kan in Singapore, editing by Jane Baird)