U.S. oil prices closed off session lows on Monday as the dollar rally lost momentum, though gloomy economic prospects in Europe and Asia weighed on crude futures.
The softening comes a week after crude prices hit 2016 highs on the back of a quicker-than-expected rebalancing in physical oil markets.
Crude futures clawed back some ground as the dollar's rally stalled in morning trade.
Still, the dollar has risen about 1.4 percent from June lows, lifted by Brexit worries, concerns over Asia's economy and the prospect of a potential hike in U.S. interest rates. The strength in the dollar makes fuel imports for countries using other currencies more expensive.
Worries that Britain will vote later this month to leave the European Union, sent stocks spiraling lower on Monday, and could erase more of oil's recent gains, traders said.