Benchmark crude fell by 84 cents to US$98.26 per barrel in New York during the early afternoon.
Prices dipped on reports that credit ratings agency Standard & Poor's will downgrade France and Austria. The Financial Times reported that those countries will drop a notch from triple-A to AA+.
A downgrade could make it harder for the European Union to raise money and overcome massive government debts.
A recession already is expected in the eurozone, and huge spending cuts will likely cut European energy demand this year.