Brent crude slipped further and U.S. crude turned negative as trade moved to European trading hours on Monday with concerns about faltering global growth and Europe's intractable debt crisis hitting investor confidence.
The concerns over a further slowdown in the euro zone economy, which could lead to lower oil demand, overshadowed supply disruptions in the U.S. Gulf due to a storm and in strike-hit Norway.
Brent crude slipped by 57 cents to $90.41 a barrel by 1:30 PM U.S. crude fell 41 cents to $79.35 a barrel.
Oil is on track to post its biggest quarterly fall since the financial crisis in 2008 as the euro zone crisis and weak growth in the United States roil global markets, while ample supply from OPEC has added to the downward pressure on prices.
"Another round of European sovereign debt issues ... and bearish fundamentals have already started to weigh on oil prices," Morgan Stanley said in a research note.
"If OPEC production continues at today's levels, stocks would build above normal through the third quarter and supply would outstrip demand in 2012."
European shares and the euro also fell. Investors were sceptical that a June 28-29 European Union summit would make any substantial progress towards tackling the euro zone debt crisis, now in its third year and buffeting Spain, the region's fourth largest economy.
German Chancellor Angela Merkel agreed on Friday with leaders of France, Italy and Spain on a 130 billion euros package to revive growth, but resisted pressure for common euro zone bonds or a more flexible use of Europe's rescue funds.
Before the European market open, U.S. crude and Brent crude were trading higher than Friday's close as a storm threat shut a quarter of U.S. offshore crude and gas output, while a strike in Norway closed two major fields including benchmark grade Oseberg.
U.S. companies shut oil and natural gas production in the Gulf of Mexico as a precaution ahead of Tropical Storm Debby, even as forecasters said the storm could head north and miss the vital offshore energy facilities.
The U.S. Gulf of Mexico is home to about 20 percent of the nation's oil production.
Oil workers in Norway went on strike from Sunday and shut down the Heidrun and Oseberg fields, which together account for about 9 percent or 150,000 barrels per day of Norwegian oil production.
Oseberg is one of four North Sea grades used to determine Brent prices. A full production shutdown in Norway is unlikely, as the government has the authority to force a settlement if a dispute threatens its most vital industry.
