Brent crude oil fell almost 2 percent toward $61 a barrel on Monday after Iran said a deal on its nuclear program could be agreed this week if the West lifted sanctions, which could boost the country's oil exports.
Oil prices were also depressed by a stronger dollar and reports of a rise in Libyan crude output, traders said.
Brent crude hit a low of $61.18 a barrel and was at $61.30 by 7.20 a.m. ET, down $1.28. Front-month Brent jumped 18 percent in February, the largest monthly rise since May 2009.
U.S. crude was down 95 cents at $48.81 a barrel.
"If there is the political will to accept that an agreement and sanctions cannot go together, then we can have an agreement this time," Iranian Foreign Minister Mohammad Javad Zarif said in Geneva.
The dollar hit an 11-year high against a basket of currencies after a rate cut in China dented the Chinese yuan and also hit emerging Asian currencies.
Disruption to oil supplies from members of the Organization of the Petroleum Exporting Countries has helped support crude with lower output from Libya and Iraq in January and February.