SINGAPORE: Brent crude held above $111 a barrel on Monday as hopes Greece can avoid a near-term bankruptcy brightened the outlook for oil demand from Europe, while violent protests in Egypt reignited supply concerns.
The Eurogroup is due to try to hammer out a deal later in the day to get international lenders to release emergency aid to Greece before its next debt repayments.
Germany Chancellor Angela Merkel said she was confident a deal could be reached, while the French finance minister said an agreement was close.
Brent crude slipped 26 cents to $111.12 a barrel by 0322 GMT, while US crude fell 30 cents to $87.98.
"Markets could be a little bit cautious today on macro related political events happening this week. On Greece debt deal, depending on the outcome, oil (prices) could go either way," said Natalie Rampono, a commodity strategist at ANZ.
"Investors are still uncertain of the situation in the Gaza Strip ... The main driver for oil prices the next few weeks, though, will be the US fiscal cliff and whether markets will pre-empt positive or negative results."
The White House and Congress are set to resume negotiations this week to avoid a series of automatic tax hikes and spending cuts worth $600 billion set for January, which investors fear could tip the world's biggest oil consumer into recession.
Lawmakers in both the Democratic and Republican parties have been trying to convince the public - and financial markets - that they are willing to compromise and can reach a deal before the end of the year.
"After last week's solid gains, equity markets are getting to a level where investors will need tangible evidence of good outcomes on Greece, the fiscal cliff and economic growth to push prices higher," said Ric Spooner, chief market analyst at CMC Markets in a note on Monday.
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