U.S. light crude dropped $1.14 a barrel to $94.79 by 7:50 a.m. EST. It hit a record of $96.24 on Nov 1. London Brent crude lost $1.13 to $90.95.
Oil has climbed about 40 percent since the summer and reached a record high above $96 a barrel last week, boosted by the weak dollar, concerns over tight supplies this winter and speculative inflows into oil and other commodities.
But Citigroup's write-off of up to $11 billion in subprime mortgage losses has sparked new worries over the U.S. economy and the prospects for a slowdown in its energy demand growth.
Tensions in the Middle East have helped drive oil's ascent, including a recent flare-up between Turkey and Kurdish rebels in northern Iraq. But analysts said a slight softening in tone was helping to pressure prices.