Benchmark oil prices may fall this week, reacting to softer economic data expected from China which will likely show a slowdown in activity is gathering momentum in the world's second-largest economy, according to CNBC's weekly survey of oil market sentiment.

Bearish respondents were in the clear majority with nine out of the ten respondents expecting prices to soften further this week and some are looking for U.S. crude to break below $80 a barrel. "We've reentered to the short side on WTI (Western Texas Intermediate, the contract for U.S. crude futures) and look to retest $77-78 area to the downside," said Tom Weber at Portfolio Managers, Inc. Commodity Futures & Options.

U.S. light, sweet crude [CLCV1  85.00    0.55  (+0.65%)   ] Friday sank 3.3 percent to $84.45 a barrel at the close after U.S. Labor Department data showed the economy created 80,000 jobs in June, below median forecasts for jobs growth of 100,000. London Brent crude [LCOCV1  99.13    0.94  (+0.96%)   ] on the ICE futures exchange settled at $98.19 a barrel, down $2.51 or 2.5 percent.

In the first batch of numbers in a data-heavy week from China, annual consumer inflation eased more than expected to 2.2 percent in June from 3.0 percent in May, which could create more room for the central bank to ease policy to bolster economic growth.

"A low print here may be construed as a lack of growth or confidence so we should be wary," said Jonathan Barratt, CEO, Barrattsbulletin.com, adding that such tame inflation data "could be countered by more stimulus."

Oil prices stabilized in Asian trade with U.S. crude futures trading near $84.39 a barrel and London Brent crude for August delivery around $98.29.

China's central bank last Thursday cut its key lending and deposit rates for the second time in less than a month. Although the European Central Bank and the Bank of England also eased monetary policy on the same day, the measure failed to convince commodity market investors and raised concerns policymakers were running out of options.

"Central bankers are running out of bullets," said David Kotok, Chairman & Chief Investment Officer at Cumberland Advisors, who has a ‘neutral' call on the oil market for this week.

"Caution is the better part of valor in trying to call a change in trend this early, especially when global central bank intervention does very little to affect the markets, at least in the way they likely hoped," said Kirk Howell, Chief Operating Officer of SunGard's Kiodex, who has a 'bearish' view this week.

Howell added: "Japan will join the party Thursday (when the Bank of Japan's announces its decision after its two-day policy-setting meeting that starts on Wednesday) but central banks are running out of ammunition...they are starting to lose the illusion of control and we are starting to enter uncharted territory."

Bullish Themes

Others are less pessimistic, saying it will take time for accommodative central bank policy action to work its way through to the real economy.

"It's a money printing fest," said Kevin Kerr, President & CEO of Kerr Trading International. "Oil prices will remain under pressure but all the easing will catch up with us. I expect prices to start climbing toward Q4. China cutting will put a damper on enthusiasm for now."

Though the overwhelming bias remains for price weakness, bullish themes — including an oil workers' strike in Norway, Middle East tensions and the U.S. Atlantic hurricane season — that may help limit the losses.

"This week prices are likely to be mostly directed by the macro policy responses and headlines, unless there is some noise from Iran," ANZ analysts led by Mark Pervan wrote in their Commodity Daily on Monday.

Negotiations between Norway's offshore oil workers and employers over pay and pensions failed for a third time on Sunday, risking a total shutdown of oil and gas production from Tuesday, both sides involved in the talks said.

The strike has already cut Norway's oil production by about 13 percent and its gas output by about 4 percent and affected crude shipments from the world's no. 8 oil exporter.

Meanwhile, a senior Iranian military commander said Iran will block the strategic Strait of Hormuz at the mouth of the Gulf, the passageway through which a fifth of the world's oil flows, if its interests are seriously threatened, Al Jazeera reported.

The World's Biggest Oil Reserves"We do have a plan to close the Strait of Hormuz," state media quoted General Hasan Firouzabadi as saying on Saturday. "But Iran, acting rationally, will not close the corridor through which 40 per cent of the world's energy passes, unless its interests are in serious trouble," he said, referring to the country's crude revenues.

Cliff Kupchan, Director, Middle East at risk consultancy Eurasia Group said Iran has escalated the rhetoric and stepped up military exercises after the EU's implementation of an oil embargo on July 1. The U.S. responded with increased military deployments in the Gulf area.

"Both developments have rattled markets," Kupchan said and though the chance of an inadvertent or unauthorized U.S.-Iran clash has marginally increased, "all parties to the standoff seek to avoid military conflict at this time."

He added: "Tensions have risen, and they will stay high and provide support for oil prices. But underlying political risk surrounding the Iran crisis has not and very probably will not rise significantly in coming months."

Alastair Newton, Senior Political Analyst at Nomura said though oil markets "probably have it right for now" as far as geopolitical risk is concerned, a reversal couldn't be ruled out.

"Even discounting other possible threats to oil output (notably Iraq where the political and security situations continue to deteriorate worryingly), a reversal in the recent trend of perceived and actual geopolitical risk to oil supply could occur at any time — and perhaps especially if the P5+1 (the five permanent members of the U.N. Security Council plus Germany, negotiating with Iran over its uranium enrichment program), process were to stall completely in the run-up to the US elections on 6 November," Newton wrote in a report on July 2.