Oil rose above $74 a barrel on Monday as the euro steadied, although worries about euro zone economic stability saw the commodity record its biggest monthly loss in 18 months.
Trade was thin as the U.S. and UK markets are closed for a public holiday, with Asian stocks and the single currency managing to rebound after markets were hit on Friday by a downgrade of Spain's sovereign credit rating.
U.S. crude for July delivery rose 46 cents to $74.43 by 0803 GMT, after settling down 58 cents on Friday.
Front-month crude is down 14 percent in the month of May, the biggest monthly percentage loss since December 2008.
London Brent crude rose 55 cents to $74.57 a barrel.
Fitch Ratings downgraded Spain's sovereign credit rating by one notch on Friday, saying the country's economic recovery will be "more muted" than government forecasts due to austerity measures, another blow to the euro zone as it tries to bolster its battered currency.
"It's not a shocking thing any more. It's just confirming what they (traders) already know," said Clarence Chu, a trader at Hudson Capital in Singapore.
The euro edged up against the dollar, although remained capped by comments from Chinese Premier Wen Jiabao, who warned on Monday that global economic growth remained vulnerable to sovereign debt risks and the possibility of a second downturn.
In a sign of bearish sentiment for oil prices, money managers cut net crude oil long positions on the New York Mercantile Exchange by 12,558 positions in the week to May 25, Commodity Futures Trading Commission data showed on Friday.
Traders are keeping an eye on forecasts for the Atlantic hurricane season that have revived concerns of disruption to supplies in the Gulf ofMexico, where BP (
BP.L) was trying to plug a gushing oil well.
Agatha, the first named storm of the 2010 Pacific hurricane season, slammed into the Guatemalan coast near the border withMexicoon Saturday, killing at least 96 people in Central America.
Investors are also looking ahead to demand figures as the U.S. driving season, when motor fuel demand peaks, started at the weekend and runs until Labor Day in early September.