U.S. light crude for November delivery fell $4.28 a barrel to $89.60 by 1144 GMT, its fourth day of losses.
It touched a session low of $88.89, its lowest since early February. Prices have dropped nearly 40 percent from a peak of $147.27 on July 11.
London Brent crude was down $3.99 at $86.26 a barrel.
"The prevailing macro sentiment is now crystallising around the notion that we are heading into a synchronised global slowdown, a mirror image of the across-the-board expansion we saw from 2004 to early 2007," said Edward Meir, of broker MF Global.
Oil demand in the United States, the world's top energy consumer, has slumped this year under the weight of record prices, while consumption in Japan and Europe has also weakened.
There are already questions over China, where rapid economic growth helped trigger oil's rise from just $20 a barrel in 2002.
"I think the market's starting to build this into prices," said Mark Pervan, senior commodities analyst at ANZ.
"You would expect the market is now joining the dots and thinking ... this will probably flow through to China."
U.S. and European governments are trying to underpin the financial sector but this has so far failed to reassure investors.
The United States has passed a $700 billion financial rescue plan, while European governments have offered guarantees to savers, as well as coming to the aid of troubled banks.
But European shares were down more than 5 percent on Monday, following on from heavy losses in Asian markets.
DOLLAR CLIMBS
The U.S. dollar's rise versus the euro has added to pressure on commodities, which are mostly priced in the U.S. currency.
Coffee, sugar, corn were down sharply, copper fell almost 7 percent to a 20-month low. But gold, a traditional safe haven in turbulent times, firmed, recouping earlier losses mainly due to the strong dollar.
With oil prices sliding, OPEC member Iran said $100 a barrel was too low and urged members of the Organization of the Petroleum Exporting Countries (OPEC) to respect their quotes to prevent oversupply from worsening.
"With the OPEC decision to cut, oversupply could be controlled in the first quarter of 2009," said Oil Minister Gholamhossein Nozari, referring to OPEC's agreement last month. "But if they (OPEC members) do not carry out the cut, oversupply could reach 1.2 million bpd."
OPEC President Chakib Khelil said OPEC would seek to balance the market when it meets in December.
He told Algerian government newspaper El Moudjahid that demand had declined by an estimated three million barrels per day as a result of falling requirements in the main consuming countries, while supply had remained steady.
OPEC oil supply fell in September, the first monthly decline since April, due to disruptions from two of its African members and lower shipments from Iran and Saudi Arabia, a Reuters survey showed on Friday.
But ANZ's Pervan warned that OPEC's influence was limited in a market being driven more by demand fears than supply concerns.
"I have (oil's floor) at $80 now, but there are risks it could move down to $60," he said.
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