NEW YORK (Dow Jones)--Crude futures fell Monday as concerns grow about the exposure of Europe's banks to a Greek default, a situation that threatens lending in global financial markets and could weigh on the broader economy.

Light, sweet crude for October delivery recently traded 47 cents, or 0.5%, lower at $86.77 a barrel on the New York Mercantile Exchange. Brent crude on the ICE futures exchange traded fell $1.23, or 1.1%, to $111.54 a barrel.

Oil futures fell amid an investor shift from risky assets, with declines across commodities, stocks and the euro. Traders fear that French banks in particular could be threatened by their holdings of Greek and other risky sovereign debt.

Shares of BNP Paribas (BNPQY), Societe Generale (SCGLY) and Credit Agricole SA (CRARY) fell Monday on expectations that Moody's Investors Service Inc. could downgrade French banks later this week. The cost of insuring the debt of European governments and banks against default continued to rise to record highs.

"Another round of financial turmoil and a double-dip recession appear closer now than at any time over the last three years," said analysts at JBC Energy in a client note.

Investors in oil and other markets are worried that the situation in Europe could make finding credit difficult, threatening to undercut the tepid recovery across global markets.

Any slowdown in Europe or the global economy would likely reduce crude demand, particularly for Brent crude, Europe's benchmark. Brent continues to trade at a near record premium to U.S.-traded West Texas Intermediate, though a return of Libyan production and European economic weakness could help narrow the gap.

The Organization of Petroleum Exporting Countries on Monday trimmed its 2011 and 2012 oil demand forecast due to the weakening economy, though the group hinted that some of its members could reduce production as a slowing economy dents oil demand.

The International Energy Agency, which represents oil-importing countries, is expected to release its own report Tuesday.

Meanwhile, hurricane activity in the Atlantic has quieted, reducing the threat to oil and natural gas production in the Gulf of Mexico. The National Hurricane Center forecasts that Tropical Storm Maria will head north before reaching the Bahamas.

Front-month October reformulated gasoline blendstock, or RBOB, recently traded 1.4% lower at $2.7316 a gallon. October heating oil recently traded 1.3% lower at $2.9482 a gallon.