Oil fell more than a dollar, pressured by fund selling and equity market weakness in response to fears of an economic slowdown in top energy consumer the United States.

US light crude for March delivery was $1.50 lower at $88.52 a barrel by 1458 GMT, after a gain of $1.06. London Brent crude fell $1.45 cents to $89.02.

A series of bullish factors had helped oil prices advance above $90 a barrel, including shipping delays into the United States caused by fog in the Houston Ship Channel, attacks by Turkey on northern Iraq and an armed raid by militants on an oil pipeline hub in Nigeria.

But these ultimately did not outweigh worries about the broader economic outlook.

"It's pressure from fund liquidation brought on by the bearish economic fundamentals that could mean lower demand for oil," said Christopher Bellew, senior vice president at Bache Commodities.

Major US equity indexes fell more than 1 percent after publication of data that showed a big contraction in the US economy's huge service sector. "That's more fodder for a recession argument," said Joe Saluzzi, co-manager of trading at Themis Trading.

Gold, which has benefited from turmoil in the equity markets, was also under pressure and fell more than one percent, as profit taking kicked in after last week's all-time high.