World oil prices slipped today amid concerns over the impact of the euro zone debt crisis and another Chinese interest rate hike on global demand for energy.
New York's main contract, West Texas Intermediate for delivery in August, dipped 16 cents to $96.73 a barrel.
Brent North Sea crude for August shed 38 cents to $113.23.
Separately, China hiked its interest rate by 25 basis points today, the third hike this year and the latest effort aimed at curbing rising inflation.
The move comes as the government places priority on fighting rising consumer prices and despite recent fears of an economic slowdown in China, which is the world's biggest energy consuming nation.
Oil had made solid gains yesterday, helped by a tentative surge in optimism on the US economy.
However, prices ran out of steam after ratings agency Moody's slashed its credit rating on euro zone struggler Portugal by four notches to Ba2 from Baa1 - and warned it could need another bailout.
Moody's said the downgrade reflected 'the growing risk that Portugal will require a second round of official financing before it can return to the private market (to raise fresh funding).'
The bad news out of the euro zone contrasted with the United States, which yesterday said new orders for US manufactured goods rose 0.8% month-on-month in May after a 0.9% drop in April.
Attention is meanwhile shifting to the European Central Bank's rate-setting meeting tomorrow, when the ECB is expected to raise interest rates by 0.25 percentage points to 1.5% in a bid to curb inflation.
The weekly snapshot of US energy inventories will also be published tomorrow, one day later than normal, because of the Independence Day public holiday on Monday.
Further afield, traders will digest crucial non-farm payrolls data in the United States on Friday.
