The price of US oil fluctuated above $106 a barrel as traders pondered disappointing US orders for durable goods and how they would affect the US Federal Reserve's plans about winding down its economic stimulus.
Benchmark oil for October delivery was down seven cents to $106.35 a barrel in electronic trading on the New York Mercantile Exchange.
Earlier in the session, it swung between $106.06 and $107.37. The contract had gained $1.39 (1.4%) to close at $106.42 on Friday.
Oil rose after the US government said that Americans cut back sharply in July on purchases of new homes, a sign that higher mortgage rates may weigh on the housing recovery.
The US Commerce Department said today that orders for durable goods - those meant to last at least three years - fell 7.3%in July, the largest drop in almost a year. The data pointed to a struggling manufacturing sector.
Some saw the weak data as an indication that the Fed may need to wait before slowing down its bond-buying programme. A slower phase-out of the Federal Reserve's monetary stimulus could also keep the dollar weaker, making commodities that are traded in dollars more appealing to investors with other currencies.
The ongoing conflicts in the Middle East - especially in Syria and Egypt - continued to prevent prices from falling further, although analysts said gains would also be limited.
Experts also said oil prices could soon be supported by weather factors. Analyst said that according to the forecasts, there is an increased hurricane risk in the Gulf of Mexico in the next few weeks. Not only are numerous oil and gas fields located there, the US Gulf Coast is also home to key export terminals and refineries.
Meanwhile, Brent crude was down 36 cents to $110.68 a barrel on the ICE Futures exchange in London.
