But internal strife in Libya and expectations of US stimulus measures continuing for longer supported prices.
Investors were also assessing how energy reforms pledged by China late last week will impact oil and gas demand in the world’s largest net oil importer.
Brent rose 3.2% last week after France blocked a deal with Iran. A speech by Janet Yellen, the next chairman of the US Federal Reserve, had also put fears of tapering at ease, supporting global equity and commodity markets.
January Brent crude edged down 23 cents to $108.27 a barrel early on Monday while US crude for December delivery was at $93.59, down 25 cents.
“The Middle East risk premium has wound back quite a bit probably because there is less potential for major supply declines with constructive news from Iran,” said CMC Markets chief analyst Ric Spooner in Sydney.
Major world powers and Iran will engage in another round of “tough” talks in Geneva on 20 – 22 November . Sanctions against Iran because of its nuclear programme have kept some 1 million barrels of oil per day off the global market. Any agreement among nations could mean sanctions will be lifted, increasing market supply and depressing prices.
“One should probably not be too cynical and have one’s mind open to the possibility of constructive developments over time,” Spooner of CMC Markets said.
The kidnapping of Libya’s deputy intelligence chief on Sunday highlighted the country’s internal strife which has sharply reduced its oil exports.
In the US, investors will scour Fed Chairman Ben Bernanke’s speech and minutes of the central bank’s October meeting for hints on when it might start paring its asset-buying programme. Yellen’s speech last week signalled that the Fed will need stronger evidence of economic growth before tapering.
US oil futures posted their sixth straight week of losses last week as rising local supply widened its gap with Brent to about $14 a barrel ahead of the US December contract’s expiry on Wednesday.
Money managers cut their net long US crude futures and options positions in the week to November 12 for the second week in a row, the US Commodity Futures Trading Commission (CFTC) said on Friday.