U.S. crude settled down at a six-year low of $43.88 a barrel after tumbling to $42.85 earlier in Monday's session.
Brent oil fell nearly 3 percent on Monday and U.S. crude hit six-year lows on signs of higher output in the United States and Libya and a possible nuclear deal that could end sanctions for Iran, allowing more of its oil into the market.
A market data provider estimated a fresh build of more than 3 million barrels at the Cushing, Oklahoma delivery point for U.S. crude futures last week, traders said, adding to worries that stockpiles in the United States could hit record highs for a tenth straight week.
In Libya, output has risen to around 490,000 barrels per day, double from a few weeks ago, an industry source said.
The United States and Iran, meanwhile, inched closer to a political deal that would set the stage for a landmark nuclear agreement and removal of sanctions against Tehran, although differences remained. Iran has said it will boost oil exports once the sanctions are lifted.