Crude prices snapped a 7-day rally after retreating more than 1 percent on Monday as the U.S. dollar gained and stocks lowered following less positive results from the Group of 20 (G20) finance ministers' meeting over the weekend.

At Sunday's meeting in Mexico city, the G20 finance ministers and central bankers didn't work out an agreement on providing more rescue funds to the debt-burdened Europe. The G20 members asked euro zone to raise extra funds to fight against the ongoing crisis before it turned to the rest of the world. The outcomes disappointed investors and pushed down sentiment.

The G20 members also expressed concerns about risks of higher oil prices on global economic growth. They said that they welcomed a commitment from oil producing countries to ensure oil supplies.

The euro retreated from recent highs and dipped about 0.5 percent against the dollar, while the dollar index, which tracks the greenback's performance against a basket of currencies, rose nearly 0.3 percent. A stronger dollar weighed on the dollar- denominated crude oil.

On the economic front, the National Association of Realtors said that U.S. pending house sales rose 2.0 percent in January, reaching a nearly two-year high and indicating that recovery of the U.S. house market was picking up steam.

Light, sweet crude for April delivery dropped 1.21 dollars, or 1.10 percent, to settle at 108.56 dollars a barrel on the New York Mercantile Exchange. In London, Brent crude for April delivery also retreated and last traded around 124 dollars a barrel.