LONDON: Oil prices retreated on Monday, dipping below $111 a barrel after an expected Iranian vote to suspend crude exports to Europe was postponed and markets continued to wait for a deal on Greek debt.
Brent crude futures were down 55 cents to $110.91 a barrel by 0919 GMT and US crude was down 75 cents at $98.81 a barrel. Both contracts gained more than 1 percent last week.
Analysts and traders said that prices had retreated a little after an Iranian parliamentary vote expected on Sunday proposing the immediate suspension of crude oil exports to the European Union did not go ahead.
Lawmakers had raised the possibility of turning the tables on the EU which will implement its own embargo on Iranian oil by July as it tightens sanctions on Tehran over the nuclear programme.
"The news flow regarding Iran will continue to drive prices. If there are further comments about stopping oil exports to Europe, prices will rise, but I rather doubt this will happen. It is just jawboning," said Carsten Fritsch, an energy analyst at Commerzbank in Frankfurt.
Christopher Bellew, a trader at Jefferies Bache in London, said that continued uncertainty around Iranian exports was keeping a floor under oil prices.
The International Atomic Energy Agency (IAEA) has a delegation in Iran to try to resolve a row about the nuclear programme that Iran says is purely civilian but the West suspects is for nuclear weapons manufacture.
India, a major customer for Iranian crude, said it would not join the wider international efforts to put pressure on Tehran by cutting oil purchases.
Investors are also monitoring the progress of negotiations for a second bailout package for Greece.
European leaders meet today to finalise details on a permanent rescue fund for the eurozone but discussions between the Greek government and private bondholders are not expected to conclude before the summit begins at 1400 GMT.
Without an agreement on a second bailout Greece will face default when some 14.4 billion euros of bonds mature on March 20.
"If nothing falls apart over the next several days it will pave the way for Europe to move a bit more into the background and open the window for risk asset markets to trade more based on the fundamentals ...and not simply whether the EU will implode or not," Dominick Chirichella of the Energy Management Institute said in a note.
Concerns about growth in the eurozone sent shares lower on opening, and the gloomy market sentiment overshadowed commodity markets.
"The deteriorating economy in Europe is being priced in and there is a concern on whether we'll face an EU-led recession," said Victor Shum, senior partner at oil consultancy Purvin & Gertz.
Elsewhere, supply fears eased as top exporter Nigeria resumed Bonny Light crude output after Royal Dutch Shell finished repairs to a damaged oil pipeline.
Also, on Sunday Sudan released vessels loaded with South Sudanese oil after they were held at a Red Sea port in a dispute over export transit fees.