The euro fell to a four-year low against the dollar on signs the euro zone's debt crisis is spreading to its banking system. A stronger dollar weighed on crude, making it more expensive to those using other currencies.

US equities were little changed. Wall Street erased losses following data showing US manufacturing expanded for a 10th straight month, but investors remained fearful of a slowing economy.

US crude for July delivery fell 79 cents to $73.18 a barrel by 2:07 p.m. EDT (1807 GMT). ICE Brent crude for July fell $1.57 to $73.08 a barrel. Brent touched $68.15 a week ago, the lowest intraday price for a front-month contract since Feb. 5.

"Volatility is the central theme," said Gene McGillian, analyst at Tradition Energy in Stamford, Connecticut. "Crude hasn't shown the strength to stay above $75. The market is waiting to see if the European contagion will spread." US crude had no oil futures settlement price on Monday because of the US Memorial Day holiday. The New York Mercantile Exchange will combine Monday's and Tuesday's trading sessions into one.

"The euro pulled back from its highs and so did crude as they react to positive US economic data and the earlier less positive data from China and Europe," said Stephen Schork, president at the Schork Group in Villanova, Pennsylvania.

Manufacturing growth slowed across the globe in May as the pace of new orders eased and uncertainty grew over what damage Europe's debt crisis might do to the fragile economic recovery.

China's factories scaled back production last month and slowed the pace of hiring, the purchasing managers' index (PMI) showed. Expansion of manufacturing activity in the euro zone also slowed sharply in May from the previous month, another survey showed.

"The figures point to slower economic growth toward the end of this year," said Eugen Weinberg, commodities analyst at Commerzbank in Frankfurt. "The fear is that Chinese officials will tighten monetary policy and this will also dampen growth."

US crude posted its biggest monthly loss since 2008 in May, losing almost 14 percent, after the European economic crisis raised the prospect of reduced fuel demand.