Oil rebounded

West Texas Intermediate crude headed for its biggest loss in a week as U.S. economic data bolstered the outlook for higher interest rates. Brent declined in London amid concern Chinese demand is slowing.

Futures dropped as much as 0.9 percent in New York and 0.8 percent in London. Both grades were heading for their biggest quarterly loss in more than two years. The dollar traded near its highest closing level against the euro in more than two years, curbing the appeal of commodities, amid speculation the Federal Reserve will increase interest rates. Gauges of Chinese manufacturing are due tomorrow and on Oct. 1, and U.S. payrolls data will be released on Oct. 3.

"It will be a very heavy week in macro data," Olivier Jakob, managing director at consultants Petromatrix GmbH in Zug, Switzerland. "China is not a strong story. For financial investors, the Fed moving out of quantitative easing does not call for investment in commodities," he said by e-mail.

WTI for November delivery slid as much as 80 cents to $92.74 a barrel in electronic trading on the New York Mercantile Exchange and was at $93.22 at 12:59 p.m. London time. The contract climbed $1.01 to $93.54 on Sept. 26, the highest close since Sept. 17. The volume of all futures traded was about 15 percent below the 100-day average for the time of day. Prices have lost 12 percent in the past three months, the biggest quarterly drop since June 2012.

Brent for November settlement decreased as much as 73 cents to $96.27 a barrel on the London-based ICE Futures Europe exchange. The European benchmark crude traded at a premium of $3.52 to WTI on ICE, near the narrowest in more than a year. Brent has lost 14 percent this quarter.