Oil falls on demand concerns (2)

U.S. lawmakers returned to negotiation on Tuesday in an effort to avoid "fiscal cliff". They only had seven weeks to reach an agreement before an automatic tax increases and budget cuts take effect on Jan.1.

Worries about the "fiscal cliff", which could drag the world's largest economy back to recession in the first half of next year, had been weighing the markets.

In Europe, global lenders held back from giving further aid to debt-burdened Greece but gave the country two more years to implement the required austerity targets.

Light, sweet crude for December delivery dropped 19 cents, or 0. 22 percent to settle at 85.38 dollars a barrel on the New York Mercantile Exchange.

Brent crude for December delivery also slipped and last traded around 108 dollars a barrel.

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