Oil hovers above US$86

Oil prices hovered above US$86 a barrel Tuesday as economic growth in China slowed slightly and German officials dampened hopes that a broad plan to contain Europe's debt crisis will be completed this week.

By early afternoon in Europe, benchmark crude for November delivery was down 15 cents at US$86.23 a barrel in electronic trading on the New York Mercantile Exchange.

The contract fell 42 cents to settle at US$86.38 in New York on Monday.

In London, Brent crude for December delivery was down 76 cents at US$109.40 a barrel on the ICE Futures exchange.

Crude has risen from US$75 two weeks ago as investors bet European leaders will soon announce a plan that will stem the contagion from a possible Greek sovereign debt default. However, German finance chief Wolfgang Schaeuble on Monday dampened expectations that they would hammer out a comprehensive solution at an upcoming summit in Brussels this weekend.

Schaeuble's comments "pushed up risk aversion noticeably and pushed down the price of oil," said analysts at Commerzbank in Frankfurt.