Brent crude futures slipped further away from $93 a barrel on Tuesday and partially erased the previous session's gains, with concerns about abundant supply outweighing the positive boost to prices from the US dollar's recent weakness.

Crude oil futures reversed course on Monday with Brent ending the session higher after falling earlier, following a slump in the US dollar. The dollar suffered its biggest one-day drop since January on Monday against a basket of major currencies, but steadied in the Asian time zone on Tuesday.

An increase in the US dollar makes oil more costly for buyers using other currencies.

The rally in oil prices on Monday was a short-term reaction to the fall in the dollar, said Ric Spooner, chief market analyst at Sydney's CMC Markets.

"The momentum (in oil prices) has been downward. One of the key bits of news is Saudi Arabia cutting prices. This removes any near term potential for production cuts," leaving oversupplied oil markets to weigh on prices, Spooner said.

Saudi Aramco will sharply cut official oil prices for Asian customers in November, the state-run company said on October 1, in the clearest sign yet the Opec member and world's largest exporter is trying to compete for crude market share.

Brent oil for November delivery was down 9 cents at $92.70 a barrel by 0427 GMT after ending 48 cents higher in the previous session. It hit an intraday low of $91.25 a barrel on Monday.

US November crude dropped 8 cents to $90.26 after it settled 60 cents higher on Monday.

"The market has stripped out any risk premium for geopolitical issues. A bit of a tightening up (of supply) over Libya for example is not going to make much difference (to prices)," Spooner said.

But he still saw oil markets as vulnerable to geopolitical shocks from the Middle East.

Fighting raged between Kurdish defenders and Islamic State militants in Kobani, a town on the Syrian-Turkish border, on Monday in an assault that has lasted almost three weeks.

Nato would support member Turkey if it came under attack from fighting involving Islamic State militants in neighbouring Syria, alliance Secretary General Jens Stoltenberg said on Monday.

Germany and France will present a new proposal shortly under which their soldiers could help monitor a ceasefire between Ukraine and pro-Russian separatist forces in eastern Ukraine, a German foreign ministry spokesman said on Monday. - TradeArabia News Service