Oil slipped in early Asian trade on growing concerns that a sovereign debt problem in Greece may turn into a full-blown banking crisis, with a stronger US dollar helping oil extend the previous session's losses.
US crude fell 75 cents to $US87.21 a barrel, after settling $US1.44 a barrel lower at $US87.96 on Friday.
The front-month contract rose 72 cents last week, or 0.83 per cent, extending gains to a fourth week. Brent crude slipped 62 cents to $US111.55 a barrel, after sliding 55 cents, or 0.49 per cent, last week.
Fundamentals
Investors expect the Federal Reserve to take steps to pull down long-term interest rates when policymakers meet on Tuesday and Wednesday to help revive the persistently weak US economy.
Greece pledged to take the tough decisions needed to avoid default but announced no new austerity measures to secure international bailout funds next month.
Germany's Social Democrats beat Angela Merkel's conservatives in a regional vote in Berlin, handing the chancellor her sixth election defeat this year ahead of a key euro zone vote in parliament in two weeks' time.
EU finance ministers broke no new ground in dealing with the euro zone debt crisis in discussions over the weekend.
At least 26 people were shot dead and hundreds wounded on Sunday when security forces fired on demonstrators who charged police lines in Yemen's capital Sanaa, in a dramatic escalation of protests against President Ali Abdullah Saleh.
Libyan interim government forces fled in chaos from Bani Walid and pulled back from Sirte after yet more failed attempts to storm Muammar Gaddafi's final bastions and take control of the entire country.
A spokesman for Gaddafi said that 17 "mercenaries", including what he called French and British "technical experts" have been captured in Bani Walid.
China's housing inflation eased a touch in August with home prices in major big cities remaining flat for a second consecutive month, official data showed on Sunday.
Reuters