"Right now the market is just liquidating. Brent is suffering from the same problem: tremendous growth in speculative length in the last few weeks. As the market moves lower, there's going to be more pressure on it as well."
Investors also fretted that the manufacturing surveys later this week might highlight weakness in China.
Activity in China's manufacturing sector may have contracted in July for the first time in 10 months, a Reuters poll showed, signaling a protracted slowdown in the world's second-largest economy as demand at home and abroad sags.
"Chinese data along with actions by the government are clearly pointing to a slowing of the main economic and oil demand growth engine of the world," said Dominick Chirichella of Energy Management Institute.
U.S. consumer confidence pulled back in July as consumers were less optimistic about the outlook for the economy and labor market, according to a private sector report.