Brent crude futures fell 43 cents, or 0.6%, to $73.74 a barrel by 0130 GMT while U.S. West Texas Intermediate crude was at $69.67 a barrel, down 37 cents, or 0.5%.
Last week, both benchmarks fell for a fourth consecutive week, the longest streak of weekly declines since September 2022, over concern that the United States could enter a recession on "significant risk" of a historic default within the first two weeks of June.
Investors sought safe havens such as the U.S. dollar, strengthening the currency which makes dollar-denominated commodities more expensive for holders of other currencies.
"Oil prices are still under pressure on sluggish demand outlooks as China's economic reopening progress seems bumpy," CMC Markets analyst Tina Teng said, adding that the U.S. banking rout has also caused market jitters.
Investors will scour China's slew of economic data on industrial output, fixed assets investment, and retail sales in the week ahead for signs of oil demand improvement, she added.
"With the uneven re-opening in China and concerns that the U.S is facing a growth slowdown at a time when the X-date for the debt ceiling is rapidly approaching, topped off by a rally in the U.S dollar, market sentiment towards crude oil will remain tepid at best," IG analyst Tony Sycamore said.
Still, global crude supplies could tighten in the second half as OPEC+, the Organization of the Petroleum Exporting Countries and their allies including Russia, are making additional output cuts that is reducing sour crude availability.
The group announced in April that some members will cut output further by around 1.16 million barrels per day, bringing the total volume of cuts to 3.66 million bpd, according to Reuters calculations.
However, Iraq does not expect OPEC+ to make further cuts to oil output at its next meeting in June, its oil minister Hayan Abdel-Ghani said.
The U.S. could start repurchasing oil for the Strategic Petroleum Reserve (SPR) after completing a congressionally mandated sale in June, Energy Secretary Jennifer Granholm told lawmakers on Thursday.
This announcement was followed by a weekly report by energy services firm Baker Hughes Co which showed U.S. oil rigs fell by two to 586 this week, their lowest since June 2022, while gas rigs plunged by 16 to 141.
Meanwhile, leaders of the Group of Seven (G7) nations could announce new measures at their May 19-21 meetings that target sanctions evasion involving third countries, said officials with direct knowledge of the discussions.
The tightening of sanctions will also seek to undermine Russia's future energy production and curb trade that supports the Russian military, the people said.
India and China, the world's No. 1 and No. 3 crude importers, respectively, have been the key buyers of Russian crude since the European Union embargo started in December.
(Reporting by Florence Tan; Editing by Muralikumar Anantharaman)
By Florence Tan
