Investors are worried about the ability of politicians in Italy and Greece to push through painful reforms to resolve their debt crises. Those concerns kept the euro at the bottom of its range for this month and pushed Asian shares lower. Oil also got support from a likely fall in US crude stocks.

Brent crude gained 50 cents to $112.39 a barrel by 0248 GMT, after settling below its 200-day moving average at $111.89. US oil gained 11 cents to $98.25. It fell on Monday after closing at a 15-week high in the previous session.

"Investors are constantly in a risk-on, risk-off mode because of the uncertainty in Europe," said Natalie Robertson, an analyst at ANZ. "The key thing is to look at Europe. Macroeconomic developments are overshadowing everything else."

Italy's Prime Minister-designate Mario Monti meet the leaders of the biggest two parties to discuss the "many sacrifices" needed to reverse a collapse in market confidence that is driving an ever deepening euro zone debt crisis.

Greece's new technocrat prime minister, Lucas Papademos, said the country had no choice but to remain inside the euro zone, telling lawmakers reforms were the only way to mitigate painful austerity measures which had deepened the recession.

"Markets are faced with a medium-term outlook full of risk that economic reforms will not survive the political process," said Ric Spooner, chief market analyst at CMC Markets, in a report. "Whilst the new governments led by reform-minded economists are seen as a good starting point for the reform process, implementation will at best take time."

Brent will fall further to $109.73 per barrel, as indicated by its wave pattern and a Fibonacci projection analysis, while US oil will slide to $96 per barrel after failing a strong resistance at $98.91, according to Reuters market analyst Wang Tao.

Support came from expectations that inventories in the world's top oil consumer the United States fell for the second straight time on lower imports and slightly higher refinery runs.

On average, US crude stockpiles were forecast down 1.1 million barrels for the week ended Nov. 11, a preliminary Reuters poll of analysts showed on Monday. In the week to Nov. 4, crude stocks in the United States fell 1.37 million barrels to 338.09 million.