Oil fell as equities dropped on political turmoil in Europe and as the prospect of renewed talks between Western countries and Iran reduced Middle East tension.

Futures slipped as much as 1.7 percent and the euro weakened after Spanish Premier Mariano Rajoy faced opposition calls to resign amid contested reports about illegal payments.

Iran considers an offer by U.S. Vice President Joe Biden to negotiate directly over its nuclear program a “step forward,” Foreign Minister Ali Akbar Salehi said.

Talks to defuse tension over Iran’s nuclear work will be held Feb. 25 in Kazakhstan, Salehi said yesterday at the Munich Security Conference. The U.S. will offer bilateral negotiations if the Islamic republic’s Supreme Leader Ayatollah Ali Khamenei is prepared for “serious” discussions, Biden said the day before at the same event.

Crude oil for March delivery dropped to $96.07 a barrel on the New York Mercantile Exchange. Futures are up 5.2 percent this year.

Brent oil for March settlement fell 61 cents, or 0.5 percent, to $116.15 a barrel on the London-based ICE Futures Europe exchange. The contract settled at $116.76 on Feb. 1, the highest level since Sept. 13. The volume of all contracts traded was 16 percent above the 100-day average.

Gold prices at auction on Monday fluctuate within the range Friday, as improved U.S. economic performance reduces the appeal of gold as a safe investment.

Employment in the U.S. economy, excluding the agricultural sector in January increased by 157,000, while analysts had expected growth to 160,000.

Industrial production growth accelerated in January: the combined purchasing managers index (PMI), which is calculated by Markit, rose to 55.8 points from 54.0 points in December.

However, gold prices have experienced downward pressure due to the release of more positive-than-expected data on the manufacturing sector in January, which signaled the continuation of recovery.

Prospects for the gold price remains negative as the downtrend remains, said Matt Zeman, head of trading arm Kingsview Financial. Gold futures fell by 7.1% from October 4 reached a peak in 1798.60 dollars per troy ounce.

Demand in the physical market due to sluggish Asian low prices. Activity in the Chinese market will slow this week before the week-long celebration of the New Year according to the lunar calendar.

Stocks of the world's largest exchange-traded fund backed by gold ETF SPDR Gold Trust in January fell by 22.728 tons, which was the largest outflow since July 2012.

February futures price of gold on COMEX today fell to 1661.60 dollars an ounce, and then rose to 1672.70 dollars per ounce.