$96 a barrel on Monday as investors awaited the release this week of key U.S. economic indicators, including on jobs, home sales and GDP.
By early afternoon in Europe, benchmark oil for March delivery was down 4 cents to $95.84 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell 7 cents to close at $95.88 on the Nymex on Friday after a report showed a cooling off in new U.S. home sales.
Analysts said there was scope for price gains if the data confirm a steady recovery in the U.S. economy, the world's largest.
"Economic optimism and a general brightening of sentiment suggest that the upswing we saw last week will continue," said a report from Commerzbank in Frankfurt, noting that speculative positions betting that the Nymex contract would continue to rise were at a 10-month high.
The U.S. government will release monthly durable goods figures later Monday, and the National Association of Realtors will report on pending home sales for December. Later in the week, reports on weekly jobless claims, employment data and fourth quarter growth are due.
"If Q4 growth comes in at the 1.5 percent we expect, it will have averaged 2 percent over the past four quarters ... Slow and steady is the name of the game," analysts at DBS Bank Ltd. in Singapore said in a market commentary.
Brent crude, used to price international varieties of oil, was down 31 cents to $112.97 a barrel on the ICE Futures exchange in London.
In other energy futures trading on Nymex:
— Wholesale gasoline retreated 1.47 cents to $2.8751 per gallon.
— Natural gas fell 8.5 cents to $3.359 per 1,000 cubic feet.
— Heating oil declined 0.15 cent to $3.0474 a gallon.
Pamela Sampson in Bangkok contributed to this report.