The price of oil fell to near $104 a barrel Monday, July 29, taking a negative cue from a sharp drop in the Nikkei stock index, The Associated Press reported.

West Texas Intermediate, the benchmark for U.S. crude, was down 44 cents to $104.26 per barrel at midday Bangkok time in electronic trading on the New York Mercantile Exchange. The contract fell 79 cents to close at $104.70 on Friday in New York.

Tetsu Emori, commodity markets fund manager at ASTMAZ Futures in Tokyo, said the weak performance of Japan's stock market spilled over into energy trading. The benchmark Nikkei 225 index dropped 2.5 percent, weighed down by a strengthening yen and worries about China's economy.

"The Japanese market is down very sharply," he said. "That may be some of the reason" for crude's decline.”

Traders are also waiting to see whether the U.S. central bank will announce any alteration to its loose monetary policy. The Fed has been nudging the U.S. economy by buying massive amounts of government bonds, which has pushed borrowing rates sharply lower. But the program is widely expected to be scaled down later this year as the economy improves.

Oil prices declined last week after China, a major energy consumer, decided to press ahead with painful economic restructuring and forgo another round of stimulus even though growth has slowed.

The price of oil broke above $100 on July 3 for the first time since May 2012, mostly due to falling U.S. crude stockpiles and increased interest from financial investors.