Benchmark U.S. crude fell by 89 cents to $85.10 in midday trading. Brent crude lost $1.30 to $99.02 in London.
China's June imports increased by about 6 percent. That is down from May's rate and worse than analysts had expected. Export growth fell as well, from about 15 percent in May to 11 percent in June. China is the world's second biggest oil consumer behind the U.S. and if its economy slows it will not have the same appetite for energy.
"Crude imports into the country last month fell 14 percent from May to a seven-month low," independent oil analyst Jim Ritterbusch said. Traders will take a close look at China's second quarter GDP and industrial production numbers, due out at the end of the week, he said.
The threat of an industry shutdown in Norway ended Monday night after the government imposed binding arbitration on striking Statoil workers. That prevented a lockout that would have cut off about 1.6 million barrels a day of Brent crude. Brent is the benchmark used to price a variety of foreign oils, and many East Coast refineries use it to make gasoline.
There was also the chance that the strike would crimp supplies to major export markets, namely the U.K., the Netherlands, France and Germany, just as Europe puts in place an embargo on Iranian oil in a bid to curb its nuclear program.
"The resolution of the labor dispute in Norway is significant."" said energy trader and consultant Stephen Schork.
On Wednesday the U.S. Energy Department releases its weekly report on the nation's crude oil supplies. Analysts surveyed by Platts, the energy information arm of McGraw-Hill, estimate stocks will shrink by about 1.5 million barrels. That would be below the five-year average draw of 3.7 million barrels for the comparable week. The amount of crude in storage is about 11 percent above the five-year average.
At the gas pump, the national average for a gallon of regular remained at $3.38 a gallon, according to AAA, Wright Express and Oil Price Information Service. That's about 5 cents higher than a week ago, but still around 25 cents lower than a year ago.
In other energy trading heating oil futures fell 1 cent to $2.74 a gallon. Wholesale gasoline rose a penny to $2.77 a gallon. Natural gas lost 7 cents at $2.81 per 1,000 cubic feet.