New York's main contract, light sweet crude for April delivery, eased 32 cents to USD 38.12 a barrel.

Brent North Sea crude for April delivery fell six cents to 40.93.

"Crude prices continue to be broadly hemmed in by the opposing forces of weak oil demand and OPEC supply cuts," analysts from Societe Generale said.

Algeria's energy minister said over the weekend that the Organisation of the Petroleum Exporting Countries (OPEC) will likely cut production levels again in a bid to boost slumping oil prices when the cartel meets in March.

OPEC, which pumps 40 per cent of the world's oil, cut output last year by over 4.0 million barrels per day in a bid to reverse tumbling prices and protect revenues.

International energy consultancy CGES said Monday the cartel would find it "extremely difficult" to raise prices by cutting production because of the current economic climate.