Oil fell more than a dollar, extending losses from last week, as mild weather in the United States curbed demand for winter fuel.
The slide unravelled early gains driven by worries Iran might disrupt oil flows in response to U.N. sanctions.
U.S. crude fell, and Brent crude dropped as well.
Oil markets were closed on Monday and public holidays across Europe on Tuesday meant trading volume was thin.
After briefly touching a three-month high last Wednesday, prices fell just over a dollar last week as mild weather in top heating consumer the U.S. Northeast triggered selling.
"The weather still dominates the demand picture," said Steve Bellino, senior vice president for energy risk management at Fimat USA.
DTN Meteorlogix said temperatures in the U.S. Northeast had averaged 10-16 degrees Fahrenheit (5-8 Centigrade) above normal over the long Christmas holiday weekend. The weather was expected to average near to above normal over the next five days.
The market initially rose on Tuesday, reaching a session high of $63.20 for U.S. crude, after the U.N. Security Council agreed on Saturday to impose sanctions on Iran's trade in nuclear materials and technology, drawing a warning from Tehran.
"If necessary, Iran will use any weapon to defend itself," Oil Minister Kazem Vaziri-Hamaneh was quoted as saying by the semi-official Fars news agency on Tuesday. In the past he has
said Iran would rather not play the oil card.
Iran, the world's fourth-largest crude producer, has condemned the U.N. resolution as illegal and on Sunday vowed to speed up enrichment work, which could heighten tensions.