Oil prices continued falling on Friday as a possible downgrade on France and some other European countries spurred new concerns over the region's debt crisis.

Although there is no formal announcement of the downgrade yet, reports showed Standard & Poor's had notified European governments that it would cut the credit ratings of France and a number of European sovereigns as early as Friday.

According to reports, France will be cut by one notch from its top 3A rating to AA+, while Italy, Spain and Portugal will be downgraded by two notches, which could make it harder for European Union to raise money and overcome massive government debts.

However, the losses were capped as a major Nigerian union threatened to stop the country's crude oil production during the weekend as part of a nationwide strike and protests.

As of Friday's close, light, sweet crude for February delivery dropped 40 cents, or 0.4 percent, to settle at 98.70 dollars a barrel on the New York Mercantile Exchange.

In London, Brent crude for February delivery also declined and last traded right below 111 dollars a barrel.