Prices jumped on Friday on better US jobs data and talk of stimulus measures by the euro zone to support growth. But investors want to see more clarity on the way forward in Europe's three-year debt crisis.
Brent was down 67 cents to $108.27 a barrel by 1037 GMT after jumping nearly 3 percent on Friday. It earlier fell to a low of $107.90. US crude edged down 34 cents to $91.06 after surging close to 5 percent in the previous session.
"Prices did rise quite a lot, so it's probably profit-taking going on," said Michael Creed, an economist at the National Australia Bank.
US employers hired the most workers in five months in July, but an increase in the jobless rate to 8.3 percent kept prospects of further monetary stimulus from the Federal Reserve on the table.
Expectations for more stimulus measures to support the debt-laden euro zone and the latest pledge by China, the world's top energy consumer, to intensify its fine-tuning of monetary policy to support economic development also helped keep a floor under oil prices.
The market is now eyeing data from China due later this week, which are likely to show the world's second-largest economy is, at best, stabilising rather than recovering briskly.
SUDANESE OIL DEAL
On the supply side, a fall in North Sea output due to maintenance and lower exports from Iran on tight Western sanctions have shored up oil prices.
Adding further support, an explosion on the Iraq-Turkey pipeline has shut in about 16 percent of Iraq's oil export flow. Repairs are expected to take up to 10 days.
But Sudanese oil exports may resume soon after Sudan reached a deal with South Sudan on oil transit fees, a first step towards ending a dispute that had brought the hostile neighbours close to war. Sudan also said it wanted a border security agreement, however, before oil flows resumed.
Disputes between the countries have reduced Sudanese crude exports by about 350,000 barrels per day from early this year.
Investors are also watching Tropical Storm Ernesto, which kept on a westerly course in the Caribbean Sea on Sunday and was expected to strengthen slowly over the next 48 hours.
Forecasters expect Ernesto to move into the southern Gulf of Mexico by Thursday but said it was too early to know whether it could disrupt oil and gas operations in the gulf.