The firmer Greenback, which makes dollar-denominated commodities like crude more expensive for foreign buyers, was also a factor behind the weaker oil prices, they said.
In morning trade, New York's main contract, light sweet crude for July delivery dropped 56 cents to $121.74 a barrel from $122.30 at the close of floor trading in the United States yesterday. New York oil prices had shed $2.01 yesterday.
London's Brent North Sea crude for July delivery fell 45 cents to $121.65 a barrel. The OECD slashed its growth forecast for the world's industrial powers yesterday, raising fresh worries that energy demand would weaken, dealers said.
"It is very clear that the OECD countries are going to see soft demand," said Jason Feer, vice-president of energy market analysis at Argus Media Ltd. "All that is very bearish in terms of energy demand," he said.
The Organisation for Economic Growth and Development in a twice-yearly survey said its 30 member economies were confronting "three adverse shocks"