Data showed that China's economic engine waned in June, and traders were concerned about an increase in Iranian production.
The international and US benchmark oil prices dropped as market participants bet that China's demand for energy will be less than previously thought.
As of 7.17 a.m., the price of oil was down almost 5%. It will trade at its lowest level in months. The price of West Texas Intermediate was around its lowest since January.
China's factory output increased 3.8% in July, slower than June's 3.9% rate but still better than analysts' expectations. Youth unemployment hit a record high and retail sales grew at a slower rate.
China's central bank lowered two key interest rates Monday as Beijing tries to boost an economy struggling under the weight of a property crisis.
Analysts said that the sell-off on Monday was due to the fact that China's oil demand fell in July.
"Crude oil futures trade lower after China's economic recovery unexpectedly weakened in July on renewed cobras and after data showed an apparent 10% year-on-year drop in oil demand last month."
The European Union's proposal to revive the Iran nuclear deal is driving down prices.
Iran said it would make a decision on the EU proposal by Monday night. According to reports, Iran wants to move forward if the US is flexible.
After Russia invaded Ukraine in February, the price of oil spiked to as high as $140 a barrel, making it the most expensive year on record. In June, the price of gasoline in the US went over $5 a gallon.
Fears of a global recession have caused oil prices to fall, with market participants focusing on Chinese and US demand.
Craig Erlam, senior market analyst at currency platform Oanda, said that the figures from China were a concern. It doesn't bode well for oil demand when the country is committed to zero- carbon.
The price of oil remains elevated. The drop on Monday was not as steep as a year ago.
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