Benchmark crude for July delivery fell 38 cents to US$69.17 a barrel by late morning Singapore time in electronic trading on the New York Mercantile Exchange. On Friday, it dropped US$1.82 to settle at US$69.55 The July contract expires later on Monday. The August contract slid 44 cents to US$69.57.

Crude rose to an eight-month intraday high of US$73.23 a barrel earlier this month on investor optimism that the US economy, suffering through its worst recession in decades, may grow by the end of the year.

However, recent economic data has been mixed and reflects an economy still struggling to right itself. The Dow Jones industrial average fell 3 per cent last week.

'Oil may have peaked in the short-term,' said Victor Shum, an energy analyst with consultancy Purvin & Gertz in Singapore. 'The market is overripe for a correction. Eventually the laws of supply and demand will re-exert themselves.'

This week, traders will be looking for signals on consumer demand in a Commerce Department report on May personal spending, which has fallen for eight of the past 10 months. The University of Michigan also reports on June consumer sentiment.

On Sunday, militants of the Movement for the Emancipation of the Niger Delta said they attacked two pipelines belonging to oil giant Royal Dutch Shell in south Nigeria.

'The recent attacks haven't had much of an impact on oil because there's a lot of global spare production capacity,' Mr Shum said. 'Oil is everywhere.'

In other Nymex trading, gasoline for July delivery was steady at US$1.92 a gallon and heating oil fell 0.50 cents to US$1.78. Natural gas for July delivery slid 4.4 cents to US$3.99 per 1,000 cubic feet.

In London, Brent prices fell 29 cents to US$68.90 a barrel on the ICE Futures exchange. -- AP