Oil prices slipped below $85 a barrel Tuesday, as doubts surfaced about expanding a bailout plan in Europe and OPEC cut its estimate for world oil demand.
By early afternoon in Europe, benchmark crude for November delivery was down 63 cents at $84.78 a barrel at late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. The contract rose $2.43 to settle at $85.41 in New York on Monday.
In London, Brent crude was down 20 cents at $108.75 a barrel on the ICE Futures exchange.
Oil prices were lower after gains of 13 percent over the past week - fueled by hopes Europe will contain its debt crisis and avoid a global recession.
On Tuesday, however, it seemed that support for the bailout plan, which needs approval from all 17 members of the European Union using its common currency, could be held up by a political crisis in Slovakia.
"Market optimism could be put to the test today when the Slovakian parliament votes on the planned extension of the eurozone bailout package; agreement is far from certain," said a report from Commerzbank in Frankfurt. "We therefore regard the recent price rise as temporary."
Investor optimism was bolstered after German Chancellor Angela Merkel and French President Nicolas Sarkozy said Sunday they would finalize a "comprehensive response" to Europe's debt crisis by the end of the month.
Concern that a possible debt default by Greece could lead to a banking crisis had sent crude to a 12-month low of $75 last week. But traders now expect European leaders to agree to pump more capital into the region's banks, which would likely limit the possible damage of a default.