New York's main contract, West Texas Intermediate for delivery in April, sank 99 cents to close at $US101.83 a barrel on Tuesday.
In London trade, Brent North Sea crude for April tumbled to $US109.51 a barrel, down a hefty $US1.13 from Monday's close.
The markets appeared under pressure from profit taking ahead of Wednesday's weekly US petroleum inventory data, said Tim Evans of Citi Futures.
The Department of Energy's report is "expected to show a minor build in total crude oil stocks and moderate declines in distillate and gasoline inventories", he said.
Traders are expecting an increase of one million barrels, "a situation where the crude oil storage will be up for the sixth week in a row", said Bob Yawger of Mizuho Securities USA.
"That alone tends to put pressure on the market."
There were concerns about China's new curbs on lending in the property market of the world's largest energy consumer, said Addison Armstrong of Tradition Energy.
"China's Industrial Bank has announced curbs on property loans until the end of March, triggering worries that a slowdown in property development will staunch demand for commodities," Armstrong said.
Phil Flynn of Price Futures Group pointed to the Chinese yuan hitting a six-month low. The drop in the currency "has traders wondering if this is an ominous sign of the wheels coming off the Chinese economy".
"It also has traders wondering about the reverberations for the rest of the emerging markets that have already struggled in this new era of US tapering."
