Brent crude oil futures slid 35 cents, or 0.3%, to $111.28 a barrel 0016 GMT, after jumping 2.4% on Friday.
West Texas Intermediate (WTI) crude oil futures also fell 32 cents, or 0.3%, to $108.11 a barrel, after climbing 2.5% on Friday.
While recession fears have weighed on the market over the past two weeks, supply concerns persist, preventing a deeper drop in prices.
“Energy markets remain fraught with specific supply-side risks, which makes being exposed a nerve-wracking experience,” said Tobin Gorey, commodities analyst at Commonwealth Bank.
In June, production from the 10 members of the Organization of the Petroleum Exporting Countries (OPEC) fell by 100,000 barrels per day (bpd) to 28.52 million bpd – far from their promise of an increase of around 275,000 bpd, according to a Reuters survey.
Declines in Nigeria and Libya offset increases in Saudi Arabia and other major producers, and Libya is facing further supply disruptions due to escalating political unrest.
“This makes it even more unlikely that the group (OPEC) will meet its newly increased production quotas,” analysts at ANZ Research said in a statement.
Libya’s exports fell to between 365,000 bpd and 409,000 bpd, down about 865,000 bpd from normal levels, the National Oil Corp said last week.
A planned strike this week by Norwegian oil and gas workers could cut the country’s oil and condensate output by 130,000 bpd, dealing a further hit to supply.
Traders will be watching official August prices from Saudi Arabia, the world’s largest oil exporter, to see if the market is stretched as refiners brace for another sharp rise near the record high set in May.
Nine refining sources interviewed by Reuters expect the official selling price of Saudi Arabian Light crude, the country’s flagship product, to rise by around $2.40 a barrel from the previous month.