Oil slipped after the chief executive of Saudi Arabia's state oil company expressed fears that high oil prices could strangle economic activity.
Khalid al-Falih, chief executive officer of Aramco, said: "We are not comfortable with oil prices where they are today. We're concerned about the impact it could have on global economic growth."
Saudi Arabia actually cut output last week, saying the market was well supplied – despite prices of more than $120 per barrel and calls from some quarters for more oil to be made available.
The Saudi kingdom said it was comfortable with maintaining a 3m to 4m "cushion" of idle capacity and sees no need to increase production levels.
The move points to Saudi Arabia's suspicions that the high prices are being sustained by speculation and nervousness about potential supply shocks rather than fundamental shortage of oil.
Saudi Arabia's fears about growth contrasted with comments from Timothy Geithner, the US Treasury Secretary, who said oil, "at current levels, on its own, it won't put the recovery at risk".
Brent crude futures fell 2 cents to $123.64 a barrel and the US benchmark of West Texas Intermediate slid 59 cents to $111.69 a barrel