U.S. light crude for November delivery fell $4.28 a barrel to $89.60 by 7:44 a.m. EDT, 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.
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.
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 Monday, following on from heavy losses in Asian markets.
The U.S. dollar's rise versus the euro has added to pressure on commodities, which are mostly priced in the U.S. currency.
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.
OPEC President Chakib Khelil said OPEC would seek to balance the market when it meets in December. 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 Friday.
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.
Gold fell for a fifth day as the dollar rallied to the highest in more than 13 months against six major currencies including the euro, reducing demand for bullion as an alternative asset. Gold for immediate delivery fell 0.5 percent to $831.28 an ounce at 2:23 p.m. in Singapore. Silver for immediate delivery fell 0.9 percent to $11.035 an ounce.