The International Energy Agency, which advises industrialised nations on energy policy, said Iran's exports had rebounded in October, adding to growing supply.
Uncertainty over the euro zone's debt problems and caution over a US fiscal policy standoff pushed the euro to a two-month low and pressured European shares.
Brent slipped 47 cents to $108.60 a barrel by 0942 GMT after settling below its 100-day moving average of $109.19. US crude declined 55 cents to $85.02 after ending 50 cents lower.
"There is plenty of oil and the market is well supplied, but the economic outlook both in the United States and Europe is weak and that's putting downward pressure on prices," said Ken Hasegawa, a commodity sales manager at Newedge Japan. "But the market is supported because of fears over the Middle East."
US lawmakers return to Washington on Tuesday with a seven-week deadline to reach agreement on scheduled tax hikes and budget cuts that threaten to trigger another recession.
Both Democrats and Republicans generally agree on the need to avoid the jolt of $600 billion in deficit-reduction measures agreed in August 2011. But the main disagreement focuses on whether to extend tax cuts for everyone as Republicans want or just for those earning below $250,000 a year as the president wants.
In Europe, global lenders held back from giving further aid to debt-stricken Greece but gave the country two more years to make the cuts demanded of it.