Brent crude oil slipped towards $104 per barrel on Monday, weighed by ample supplies, weaker demand for fuel and a strong dollar, despite gains in equity markets.
The dollar was within 0.2 percent of its highest level since July 2010 against a basket of currencies, keeping a lid on a range of commodities prices.
A strong dollar tends to depress oil and other commodities that are priced in the U.S. currency on international markets.
The fundamental outlook for oil also looked less positive with a weaker demand growth for 2013 as well as higher supply, according to the West's energy watchdog, the International Energy Agency.
Brent crude futures for July were down 50 cents at $104.14 per barrel by 1240 GMT, after three straight sessions of gains. U.S. crude fell 30 cents to $95.72.
"The strength of the dollar has been negative for commodities," said Olivier Jakob, analysts at Swiss energy consultancy Petromatrix.
"But short-term the market looks fairly balanced, with Brent trading in a range between $90 and $110 per barrel. It is difficult to see it breaking out of that for a while."
Gold fell for an eighth session to its weakest in over a month as fears the U.S. Federal Reserve may wind back its economic stimulus programme hurt its appeal as a hedge against inflation. Bullion is down 20 percent so far this year.
World stock markets were close to five-year highs on Monday, boosted by optimism over the outlook for global growth. But volumes in most financial markets were low with several countries celebrating religious festivals.
Traders awaited the minutes of a U.S. Federal Reserve meeting due to be released on Wednesday to assess the outlook for the oil markets, as any hints of continued monetary easing by the U.S. central bank would be bullish.
Analysts at U.S. brokerage Jefferies Bache said they had turned more negative on oil markets and saw the chance of at least $10 more of falls in crude prices from current levels:
"We can see a renewed disconnect from the strong equities, especially if the dollar index continues to march higher," they wrote in a note to clients. "We look for underlying petroleum fundamentals to deteriorate further."
"We have shifted to a bearish stance with particular emphasis on the crude markets," they added. "Ultimate downside price possibilities in the crudes still exist about $10-$11 below current levels."
But David Hufton, managing director of brokers PVM Oil Associates in London, said Brent may stay above $100 a barrel.
"As long as U.S. investors remain bullish and 'risk on' there has to be a good chance that Brent will get through the second quarter without dipping below $100."
Oil markets found some support from tension in the Middle East, which raised worries over the security of supply from the biggest producing region.
Lebanese Hezbollah militants attacked a Syrian rebel-held town alongside Syrian troops on Sunday, and Israel threatened more attacks on Syria to rein the militia in. (Additional reporting by Ramya Venugopal in Chennai, India; Editing by Alison Birrane)