Benchmark West Texas Intermediate crude for March delivery was down 46 cents at US$95.40 a barrel by midday in Europe in electronic trading on the New York Mercantile Exchange. Nymex floor trading was closed Monday. The contract fell $1.45 on Friday.
Analysts noted that investors have bought into oil markets speculatively in recent weeks on hopes for a stronger recovery in the global economy.
The economic indicators have been mixed, however, showing many parts of Europe remain in recession and the U.S. only gradually recovering. That leaves crude oil prices vulnerable to a sell-off, according to analysts at Commerzbank.
A survey of investor confidence in Germany was upbeat on Tuesday but, looking ahead, traders are concerned about political developments elsewhere in the 17-country eurozone, mainly Italy.
Polls have suggested Italy's general elections are close, creating uncertainty over what a future government would look like. The elections would also likely yield a split parliament, meaning it would be more difficult for a coalition government to push through unpopular economic reforms.
Brent crude, used to price many international varieties of oil, was down eight cents at US$117.30 a barrel on the ICE Futures exchange in London.
In other energy futures trading on the Nymex, heating oil fell one cent to US$3.20 a U.S. gallon (3.79 litres), wholesale gasoline rose 1.2 cents to US$3.326 a gallon and natural gas added four cents to US$3.19 per 1,000 cubic feet.
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