Oil fell below $88 per barrel on Monday after a slow day of trading.
Analysts gave two reasons for the decline. One was that the truce between Israel and Hamas in the Gaza Strip appeared to be holding. The second was concern among traders that negotiations over the next installment on Greece's bailout could fail. Talks continued well into the evening in Brussels.
Oil prices tend to fall when there are worries that slow economic growth will hurt demand. And analysts said the risks associated with the tense situation in the Middle East will likely limit gains in oil prices, even if a deal is reached for Greece's bailout.
Oil for January delivery closed lower by 54 cents at $87.74 on the New York Mercantile Exchange. Prices were also down for other petroleum products.
Volume was low after the Thanksgiving holiday weekend.
AAA said gasoline prices at the pump fell a fraction of a penny to $3.423 per gallon.
Brent crude, which is used to set prices for many international varieties of oil, slipped 57 cents to $110.81 a barrel.
Other futures on the New York Mercantile Exchange:
— Wholesale gasoline fell 1.76 cents to $2.7260 a gallon.
— Natural gas dropped 17.1 cents to $3.73 per 1,000 cubic feet.
— Heating oil was down 3.06 cents at $3.0465 a gallon.