Crude-oil futures fell in Asia Monday, tracking a weaker euro as concerns over the euro zone and falling oil demand offset tensions in the Middle East.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in November traded at $92.01 a barrel at 0701 GMT, down $0.88 in the Globex electronic session. November Brent crude on London's ICE Futures exchange fell $1.03 to $110.39 a barrel.
"Market attention will likely turn to the euro-zone debt crisis this week, with Merkel-Hollande's summit disagreement over the weekend" being one of the areas of focus, Singapore-based OCBC said in a note.
News of the German and French leaders disagreeing on the timetable to introduce joint banking oversight weighed on the euro, as did Spanish Prime Minister Mariano Rajoy's reluctance to officially request a bailout.
Optimism over the euro-zone crisis gave away to uncertainty ahead of the release of the first draft of Spain's 2013 budget Thursday and as investors await Moody's Investors Service's decision on whether to downgrade Spain's debt rating, expected this week.
A drop in global oil demand and surplus oil stocks also weigh on oil prices.
Oil demand continues to be anemic in Europe and the U.S., and demand has been less than robust in emerging markets so far this year, though government stimulus may boost demand, Morgan Stanley said in a note.
"Another round of geopolitical tensions and quantitative easing in the U.S. continue to support oil prices though softer fundamentals heading into the fourth quarter should weaken crude prices into year-end," the bank said.
Oil prices are getting some support from Iran-related news, with the U.K., France and Germany calling for new sanctions against Iran over its nuclear program.
Meanwhile, reports that shipments of Forties crude are being delayed are supporting Brent.
Germany's September Ifo Business Climate Index, due at 0800 GMT, will provide further cues on the health of the euro zone, OCBC said.
Markets will also be watching a statement from the Bank of England Financial Policy Committee meeting, due at 0830 GMT. Later this week, investors will shift their attention to the results of an Italian bond auction, and French as well as Spanish 2013 budgets.
Nymex reformulated gasoline blendstock for October--the benchmark gasoline contract--fell 246 points to $2.9179 a gallon, while October heating oil traded at $3.1021, 186 points lower.
ICE gasoil for October changed hands at $972.25 a metric ton, down $2.50 from Friday's settlement.