Oil has come off its highs on reports that OPEC members Kuwait, the United Arab Emirates and Nigeria have joined Saudi Arabia in quietly boosting oil output to cool prices amid ongoing unrest in Libya, which has cut off production.
European shares closed lower on Monday with banking the biggest sector faller.
Oil concerns will continue to dominate stock movements Tuesday as fighting continued across Libya, fueling supply concerns.
Germany's Bundesbank holds a press conference on its annual report Tuesday with European Central Bank Governing
Council member Axel Weber,who steps down April 30.
Weber will speak to CNBC after the presentation of the report.
Chancellor Angela Merkel named her top aide Jens Weidmann last month as Bundesbank chief to succeed Axel Weber. His appointment makes it less likely Merkel will insist on a German becoming the next ECB president, analysts have said.
US Treasury Secretary Timothy Geithner and German Finance Minister Wolfgang Schaeuble meet in Berlin Tuesday for economic talks, days ahead of a key European Union summit about beefing up a rescue fund for debt-strapped EU members.
Moody's rating agency downgraded Greek sovereign debt by three notches Monday, raising the specter that the distressed euro zone sovereign may be forced to restructure its debt, perhaps even before 2013.
Also on the agenda are German retail trade number for December, as well as the German industrial production index, also for December.
The British Retail Consortium's UK January retail sales are also due for release and the British Chambers of Commerce will publish its latest its quarterly outlook for the UK economy, including predictions for unemployment, inflation, economic growth and interest rates.