Data showed China’s manufacturing sector contracted for third consecutive month in September, adding to doubts about Europe’s ability to solve its debt crisis nudged investors to sell riskier assets such as equities and commodities.

The gloomy economic outlook and weak demand in the United States have dragged markets down this quarter, while the expected return of oil exports from Libya, cut off by the civil war, added a bearish spin this month.

“Demand is very poor in the Atlantic basin, prices are high, unemployment is high, so we’d need to get greater confidence and a change in the employment picture to get a strong rebound,” said Olivier Jakob, an analyst at Petromatrix in Zug, Switzerland.

In London, ICE Brent for November delivery fell 48 cents to $103.47 a barrel by 1:15 p.m. EDT (1715 GMT) after hitting an early low of $101.78.

US November crude dropped $1.58 to $80.56, having fallen earlier to a session low of $80.04.

Brent crude has fallen 9.9 percent this month, its steepest drop for a month since May 2010. For the quarter, it is down down 8 percent, the weakest performance since the second quarter of 2010.

US crude has declined 9.3 percent this month, its biggest drop since May this year. For the quarter, it has dropped 15.6 percent, its worst performance since the last quarter of 2008.

Trading was volatile on quarter-end positioning and pre-weekend short-covering, traders said.

Oil investors were also tracking Wall Street, where worries about a global economic slowdown have put equities on track for their worst quarter since 2008.

Meanwhile, the dollar strengthened as reports showed positive US consumer sentiment and better-than-expected growth in Midwest business activity, prompting investors to cut holdings in riskier assets.

“A weaker S&P 500 and a stronger dollar were keeping downward pressure on the market and the Q3 wrap-up coverage focusing on the wek price performance of the past three months also weighing on market sentiment,” said Tim Evans, analyst at Citi Futures Perspective in New York.

Supply from all 12 members of the Organization of the Petroleum Exporting Countries is forecast to average 30.25 million barrels a day this month, up from 30.15 million in August, according to a Reuters survey of sources at oil companies, OPEC officials and analysts.

Libya’s output has begun to recover after falling to almost nothing in the civil war, the survey found. The country exported one small crude cargo on Sept. 25 and is reported to be sending some oil to refineries.

“If the current positive reports from Libya are confirmed, then domestic production could reach 1.3 million barrels per day by the end of next year,” JP Morgan said in a note.

“On an annual average, this would lead to exports of around 0.6 mbd of light sweet crude, which together with rising Iraqi and non-OPEC output could lift supply by around 1.9 million bpd above today’s levels.”