New York's main contract, West Texas Intermediate crude for delivery in May, dropped 58 cents to $102.44 a barrel.
Brent North Sea crude for May shed 95 cents at $123.34 a barrel in midday London trade.
China said Sunday that manufacturing activity last month hit its highest level since March last year, tempering recent concerns of a sharp slowdown in the world's largest energy user.
The official purchasing managers index (PMI) rose to 53.1 from 51 in February, helped by an increase in new orders, the China Federation of Logistics and Purchasing said. The figure marks the fourth straight rise.
A reading above 50 indicates expansion, while a reading below 50 suggests contraction.
However a separate survey by HSBC showed a less optimistic picture than the official figure.
HSBC's PMI fell to 48.3 in March from 49.6 in February, marking the fifth month manufacturing activity has remained in contraction, the bank said in a statement.
"Investors delved deeper into the official Chinese Manufacturing PMI, and decided that the bullish headline figure masked more troubling issues," said analyst David Morrison at trading firm GFT.
"This number has repeatedly contradicted data from HSBC which has now pointed to four consecutive months of contraction.
"Overall, there are increased concerns over the slowing pace of Chinese growth which could lead to reduced demand for oil."
Tensions between the West and major crude producer Iran continue to lend support to prices as investors fret over possible supply disruptions as the Islamic republic is hit by stringent sanctions.
The two sides are at odds over Iran's nuclear programme which Tehran has said is for civilian purposes but the United States and its allies believe is being used to build a nuclear weapon.
Iran has previously threatened to shut the strategic Strait of Hormuz -- a conduit for a fifth of global oil supply -- if it is hit by further sanctions from the West.
