Brent closed at $US60.50 on Friday and fell in opening trade Monday to $US59.52. It was trading at $US59.59 by the afternoon.

It is the first time Brent crude has traded below $US60 since April.

UBS oil analyst Nik Burns said the dip was a mix of US dollar strength, as investors seek a safe haven, and concern over economic growth in Europe.

"The concern around Greece and what's happening with the risk of contagion in Europe … the market's taking a view that's going to have a negative impact on economic growth, which has an impact on oil demand," he said. "In that environment you do expect the oil price to fall.

"There's also a currency impact as well, where there'll be a flight to the US dollar and it has an impact on US dollar priced commodities.

"They generally fall as the US dollar rallies."

Mr Burns said it was still early days as to whether concern over economic growth or US dollar strength would be the main driver of the oil price.

"I suspect it's the latter more than the former right at this point as there's a flight to the US currency."

However, overproduction by the Organisation of Petroleum Exporting Countries, led by Saudi Arabia, was still the major factor driving oil prices, said independent economist Saul Eslake.

"More than anything else, it is the competition between Saudi Arabia and US shale oil producers for market share," Mr Eslake said.

"I suppose slowing demand is a factor in the background but the most important factor is Saudi Arabia's attempt to undermine the economics of US shale."

The Greek crisis, Iranian nuclear talks and Chinese growth concerns were all "background stuff", Mr Eslake said.

The rising US dollar was also affecting the price of oil as brent crude was measured in US dollars, Mr Eslake said. But the result of this was dwarfed by OPEC overproduction.

"A rising US dollar will have a negative effect on oil but only marginally so," Mr Eslake said.

A research note by ANZ commodities analyst Daniel Hynes, released on Monday, also focused on the influence of US shale producers.

"US shale producers have brought down the break-even cost by $US15-$US20 per barrel," Mr Hynes said. "Prices in the current range of $US55-$US60 per barrel will be attractive for US shale production."

Mr Hynes said that crude oil fell from $US63 to $US60 last week on a rise in US crude oil inventories and US drill rig counts. "US drill rig counts rose for the first time in six months, while US crude oil inventories increased by 2.4 million barrels, the first increase in two months," he said.

"US supply growth may last longer than expected at current price levels."