Crude oil prices dropped below $98 a barrel in Asian trade Friday as investors' hopes dimmed over the outcome of a crucial European Union summit later in the day.

Light sweet crude for January delivery declined 41 cents to $97.93 a barrel in electronic trading on the New York Mercantile Exchange during Asian trading hours. Brent crude oil futures for January delivery fell 0.63 percent to $108.11 a barrel on the ICE futures exchange in London.

On Thursday, oil futures fell the most in three weeks, as worries over the European debt crisis outweighed better-than-expected report on weekly jobless claims.

Comments from European Central Bank President Mario Draghi following a rate cut announcement poured cold water on speculation that the institution may ramp up purchases of government bonds.

After 10 hours of talks in Brussels, European Union leaders failed to secure backing from all 27 countries to change the EU treaty that aims at resolving the debt crisis and stabilizing the currency.

Britain and Hungary look set to stay outside the accord, while the Czech Republic and Sweden will have to secure the approval of their Parliaments before endorsing the deal.

Meanwhile a strong dollar, which made commodities more expensive, also weighed on crude. The Euro declined 0.16 percent to 1.3319 against the dollar.