Oil falls as euro-zone woes spur demand concerns

SAN FRANCISCO (MarketWatch) � Crude-oil futures declined Monday as lingering concerns about the euro zone made investors call global oil demand into question and as the U.S. dollar traded higher.

Crude for March delivery �fell 78 cents, or 0.8%, to $98.78 a barrel on the New York Mercantile Exchange.

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Oil has ended lower for two sessions, as it inched 0.1% lower Friday after weaker-than-expected fourth-quarter U.S. economic growth also raised doubts about demand outlook.

�We are seeing the old risk-off day,� said Jim Ritterbusch, an oil analyst in Illinois.

Gasoline also ended lower, slipping off a five-month high reached Friday on refinery concerns. Such concerns were likely overblown last week to begin with, Ritterbusch said.

A higher dollar also pulled prices lower and outweighed geopolitical tensions surrounding Iran and the European Union�s recent decision to embargo many imports, including oil, from the Middle-Eastern nation.

�In contrast with the worries over Iran, global oil production looks as though it is high and rising,� said Timothy Evans, energy analyst at Citi Futures Perspective.

�The real key to the Iranian situation in our view is not whether they stop selling to Europe, but to what extent they end up curtailing production,� Evans said.

Iranian authorities have delayed a vote on whether to immediately stop sending oil to Europe, preempting the European Union embargo, which is expected to be in place by July.

Meanwhile, European leaders gathered in Brussels on the heels of Greece saying would not accept budgetary supervision as a condition of receiving more financial help. Greece�s efforts to restructure it debt have made little progress so far.

Also Monday, investors parsed news that U.S. consumers spent less in December, saving more of their rising incomes. The Commerce Department said personal income rose 0.5% last month, while personal spending fell less than 0.1%.

Economists polled by MarketWatch had expected income to rise by 0.4% and spending by 0.1%.

The Dow Jones Industrial Average DJIA �traded 0.1% lower, recovering some ground after a sharp early pullback. European and Asian stock markets mostly fell on Monday. as well Read more on Asia Markets.

The dollar index DXY , which compares the U.S. unit to a basket of six currencies, stood at 79.157 compared to 78.854 late Friday. The dollar lost some steam, however, as the day progressed. Read Currencies report.

Talks between Greece and its debt holders had continued over the weekend. Read more about negotiations between Greece and its lenders.

Investors were also digesting news that Greece�s finance minister had rebuffed reports of the imposition of a European Union commission with veto powers over Greek government budgets. Read more about Greece�s rebuttal.

Among other energy products, February gasoline �dropped 6 cents, or 1.9%, to $2.88 a gallon.

February heating oil �declined 2 cents, or 0.6%, to $3.05 a gallon.

The February contracts for gasoline and heating oil expire on Tuesday.

March natural gas �was off 4 cents, or 1.6%, to $2.71 per million British thermal units.