While Brent crude futures fell to US$94.37 a barrel by 0313 GMT, WTI crude futures dipped to US$88.97. Oil futures fell about 3% during the previous session.
China's central bank cut lending rates to revive demand as the economy slowed unexpectedly in July, with factory and retail activity squeezed by Beijing's zero-COVID policy and a property crisis.
"Commodities prices across the board were under pressure as China's July economic data painted a more downbeat growth picture than previously expected, which prompted renewed concerns on demand outlook," wrote Yeap Jun Rong, market strategist from IG Group in a note.
China's fuel product exports are expected to rebound in August to near a year high after Beijing issued more quotas, adding pressure to already-cooling refining margins.
Investors also watched talks to revive the 2015 Iran nuclear deal. More oil could enter the market if Iran and the United States accept an offer from the European Union, which would remove sanctions on Iranian oil exports, analysts said.
Iran responded to the European Union's final draft text to save a 2015 nuclear deal on Monday, an EU official said, but provided no details on Iran's response to the text. The Iranian foreign minister called on the United States to show flexibility to resolve three remaining issues.
In the United States, total output in the major US shale oil basins will rise to 9.049 million bpd in September, the highest since March 2020, the US Energy Information Administration (EIA) said in its productivity report on Monday.
Market participants awaited industry data on US crude stockpiles due later on Tuesday. Oil and gasoline stockpiles likely fell last week, while distillate inventories rose, a preliminary Reuters poll showed on Monday.
The premium for front-month WTI futures over barrels loading in six months stood at US$3.46 a barrel on Tuesday, the lowest level in four months, suggesting easing tightness in prompt supplies.
