Brent crude futures were down USD 1.07, or 1.32%, to USD 79.97 per barrel by 0945 GMT, while U.S. West Texas Intermediate crude futures fell USD 1.27, or 1.62%, to USD 76.89.
"The oil market is struggling to retain its recently recaptured USD 80/bbl floor as the recent string of weak macroeconomic indicators reassert their downward pressure while geopolitical concerns appear to fade into the background," said Harry Tchilinguirian, head of research at Onyx Capital Group.
"The shape of the Brent futures curve is also changing this morning in favour of less backwardation, as the market reassesses the relative availability of crude in view of disappointing crude import and refinery runs figures out of China."
Backwardation occurs when spot prices are higher than future prices, giving energy firms little incentive to pay to store fuel.
In China, refineries sharply lowered crude processing rates last month on tepid fuel demand.
The Organization of the Petroleum Exporting Countries (OPEC) on Monday trimmed its demand outlook for this year, citing softer expectations for China.
The real breakout from rangebound, and potentially firmer, Brent crude prices will likely come when the U.S. Federal Reserve makes a call on whether to cut interest rates or not at its September meeting, independent oil analyst Gaurav Sharma said.
Also keeping a lid on prices was Libya's Waha Oil Company resuming flows to Es Sider port after finishing maintenance work on a pipeline.
Providing a floor to prices was U.S. retail sales data on Thursday which beat analysts' expectations, while separate data showed fewer Americans had filed new applications for unemployment benefits last week, sparking renewed optimism around U.S. economic growth.
"Receding U.S. recession concerns have come to the aid of crude bulls this week, with better-than-expected retail sales and jobless claims figures allaying fears of a more rapid than expected deterioration in U.S. economic conditions," said Michael Brown, senior research strategist at Pepperstone.
As for lingering geopolitical risks, a fresh round of negotiations began on Thursday to secure a ceasefire in the Gaza war, even as Israeli troops continued their assault on the Palestinian enclave.
The talks, which have been boycotted by Hamas, were extended and will resume in the Qatari capital Doha on Friday.
Attention is also focussed on whether Iran will retaliate over Israel's killing of Hamas political leader Ismail Haniyeh in Tehran late last month.
"Expectations remain that a response will happen given that Iran needs to save face amongst neighbour states," said Panmure Liberum analyst Ashley Kelty.
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