New York’s main contract, West Texas Intermediate for delivery in August, dropped 53 cents to $90.63 a barrel.
Brent North Sea crude for August declined $1.03 to $104.09 a barrel in London morning deals. It had hit $102.28 in Asian deals, which was the lowest level for more than four months.
Crude oil futures had tumbled last week after the International Energy Agency agreed to draw on emergency reserves to make up for lost Libyan supplies and as global economic recovery fears prompted demand concerns.
“We see the highly unusual IEA measure as a reflection of serious concerns about the path of the world economy, which have been reflected in falling prices over the last two months,” analysts at JBC Energy research group said in a client note published on Monday.
“Accordingly, whether sharp cuts in oil price forecasts by JP Morgan and Goldman Sachs turn out to be correct will largely depend on the path of economic developments.
“JP Morgan cut its average forecast for Brent to $100 per barrel in the third quarter, down from $130 per barrel,” it added.
Brent North Sea crude for delivery in August nosedived by a hefty $6.95, or 6.0 percent in value last Thursday.
The IEA, which acts on behalf of industrialised nations’ energy needs, sparked a steep sell-off when it announced its decision to release 60 million barrels of crude from strategic oil stocks over the next month, as part of efforts to give the global economy relief from sky-high energy oil.
Prior to the announcement, the market was already buckling under the weight of a stronger dollar, spreading global economic gloom and contagion fears arising from the Greek-eurozone debt crisis.
Ker Chung Yang, an analyst with Phillip Futures in Singapore, said on Monday that investors remained concerned over the possible fallout from Greece’s debt crisis.
“Crude oil prices will stay volatile as the greater concern is still on Greece and the overall recovery of the US economy,” Ker said.
Adding to disquiet over Greece’s mounting debt problems were comments from Austrian Chancellor Werner Faymann, who warned in an interview Sunday: “A Greek debt default cannot be ruled out.”
Greece faces a momentous battle in parliament this week to quash dissent over additional austerity reforms needed to secure a vital new bailout from the European Union and the International Monetary Fund.
Meanwhile, the country’s influential unions have called a 48-hour walkout from Tuesday. That will come on top of rolling power cuts that have hit households across the country for the past week in action by disgruntled utility workers.
A default by Greece risks sparking a contagion across the rest of Europe which could affect global financial stability, analysts warn.