Brent crude fell below $112 a barrel tody, as fears of another US recession slowing fuel demand overshadowed supply concerns over a major shutdown of offshore oil production forced by Tropical Storm Lee.
US employment growth ground to a halt in August, reviving recession fears and piling pressure on both president Barack Obama and the Federal Reserve to provide more stimulus to aid the frail economy.
Front-month Brent fell 78 cents to $111.55 a barrel. Brent plunged almost $2 a barrel on Friday on the disappointing jobs data released in the US.
US crude was down 62 cents to $85.83 a barrel, after settling $2.48 lower at $86.45. Friday's losses wiped out part of U.S. crude's 4.1 per cent gain in the week through Thursday.
Asian stocks followed Wall Street lower today, after the US Labor Department said employers added no net new jobs last month and July's total was revised lower.
Compounding fears of a recession in the United States, Europe faces a string of political and legal tests this week that could hurt efforts to resolve its sovereign debt.
In China, the services sector grew in August at the lowest pace on record, a private survey showed, as new orders ebbed and tightening measures to rein in an exuberant property sector started to pinch.
Worsening economic woes may raise the odds of another bond buying programme, or quantitative easing, by the US Federal Reserve. That could cheapen borrowing, weaken the dollar, and encourage investment in commodities as an asset class.
Providing some support for prices was oil companies' shutdown of more than half the crude production in the Gulf of Mexico due to Tropical Storm Lee, which is hindering efforts to restaff and restart oil and gas platforms in the basin.
Lee reached Louisiana's coast early yesterday, but was moving inland very slowly. Its 45 miles-per-hour winds grounded helicopters on standby for oil and gas companies that would have otherwise ferried workers out to do post-storm assessments and restaff facilities.
Another storm, Hurricane Katia, intensified over the open Atlantic yesterday, bulking up to a powerful Category 2 storm, the US National Hurricane Center said.
The Miami-based cetnre said it was still too soon to gauge the potential threat to land or to the US East Coast with any certainty.
But most computer models showed the storm veering on a northeast track out to sea after moving safely west of the mid-Atlantic island of Bermuda later this week.
The European Union imposed a ban on purchases of Syrian oil on Saturday and warned of further steps unless president Bashar al-Assad's government ended its five-month crackdown on dissent.
In Libya, forces loyal to Muammar Gadafy refused yesterday to give up one of their last strongholds without a fight, raising the prospect of an assault on the town of Bani Walid.
The EU has lifted sanctions on Libyan ports and oil firms, but few expect the country's normal oil production - around 1.6 million bpd - to be restored soon, after a civil war halted its oil sector this year.
