Crude oil futures cruised past $102 a barrel on Monday, but later lost momentum, after reports of a possible downgrade of European sovereign debt.

Crude futures for January delivery settled up 3 cents at $100.99 a barrel on the New York Mercantile Exchange.

Crude had risen to a two week high of $102.44 a barrel after French President Nicolas Sarkozy and German Chancellor Angela Merkel pledged to tighten fiscal discipline in the euro zone.

Oil prices were also supported by calls by the US for countries to impose new sanctions on Iran over its nuclear programme.

However prices headed south in the last hour of trading after the Financial Times reported that Standard & Poor's has warned six European countries they are at risk of having their triple-A ratings downgraded.

In London Brent crude settled 13 cents lower at $109.81 a barrel.

S&P may warn Germany, France, the Netherlands, Austria, Finland, and Luxembourg that they could face having their AAA ratings downgraded as political and economic turmoil in the euro zone continues, the Financial Times reported.

Late dollar gains also pressured crude prices. A stronger dollar makes crude more expensive for holders of other currencies.

Bullion settled 1% lower as European leaders try to sooth nerves about Europe's widespread sovereign debt crisis.

Gold for February delivery, the most active contract, dropped $16.80 to settle at $1,734.50 an ounce on the Comex division of the New York Mercantile Exchange.



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