Brent crude slipped from three-week highs today, as the dollar firmed on the back of data from the United States suggesting the world's top oil consumer is not sliding back into recession.
Brent crude futures were 15 cents lower at $111.73 a barrel by midday, retreating from earlier highs of $112.48 a barrel as the dollar index to a basket of currencies surged by 0.5%.
US crude was meanwhile down 40 cents to $86.87.
The greenback firmed in tandem with stock markets, as money switched back to riskier assets after US data showed consumer spending in the world's largest economy rose at its fastest pace in five months in July.
Investors will scrutinise the barrage of key US data this week for signs on the health of the world's largest oil consumer, including consumer confidence, the ADP jobs report, ISM manufacturing and the non-farm payrolls report.
Another factor which may influence prices is the news today that Libya's largest oil terminal has reportedly been damaged during fighting between rebels and forces loyal to Muammar Gaddafi.
Reuters news agency cited oil workers and witnesses as saying the terminal had been damaged.
A Reuters witness saw flames and black smoke spurting from a tank at the Es-Sider oil terminal, which loaded an average of about 450,000 barrels per day before the uprising against Muammar Gaddafi began in February.
'One tank is on fire now, and we expect it will be damaged completely,' one oil worker who declined to be named said, adding he believed it was hit by a rocket in the last four days.
The extent of the damage was not immediately clear, and no one at the Waha Oil Company, the state-owned firm that controls the terminal, was immediately available to comment.
The oil worker, who had come to survey the damage, said two fires had been extinguished already and no one was currently working in the terminal, which has a storage capacity of 6.3m barrels of crude.
The market will also keep an eye on minutes from the US Federal Reserve's last committee meeting on August 9, due today, which could offer insight on divisions among board members over further stimulus measures.
In Europe, a merger between two Greek banks gave a much needed capital boost to a sector battered by the country's severe debt crisis that has threatened to spread through the euro zone.
