US light crude fell as low as $59.56 a barrel, the lowest since July 28. It was down 96 cents by 0820 GMT, reversing a gain of 61 cents on Friday on fears Wilma could hinder the recovery of oil operations in the Gulf.
Prices were 16 percent below the record-high of $70.85 a barrel struck in late August in the wake of Hurricane Katrina.
London Brent crude lost 95 cents to $57.53 a barrel.
"The market has been sold off after the Hurricane headed for Florida instead of the Gulf Coast. So oil production is not affected," said Tony Nunan at Mitsubishi Corp. in Tokyo.
Wilma, after devastating Mexico’s Yucatan peninsula, spared oil and natural gas production areas in the Gulf Coast on Sunday. The 22nd named tropical storm, the recordbreaking Alpha, posed no danger to Gulf oil facilities as it soaked Haiti and the Dominican Republic, before weakening.
BP Plc said on Sunday that "production levels have not been impacted", while the evacuation of nonessential employees from the central and eastern Gulf was completed on Saturday. The evacuations posed minor effect on output late last week, the US Minerals Management Service (MMS) said on Friday.
Some 65.79 percent of the normal 1.5 million barrel-per-day (bpd) of oil production in the Gulf of Mexico was shut on Friday, compared with 64.52 percent on Thursday, the MMS said.
Expectations that high prices will slow oil demand are dampening speculators’ appetite, dealers said.
"These concerns also led to a reduction in speculative long positions in the futures market, resulting in less speculative support for spot prices," said Gerard Burg from National Australia Bank in a monthly report.
US data also showed a decline in total oil product demand deepening to 3.2 percent over the past four weeks.
But the price slide may not last as "oil demand is forecast to increase as the northern winter approaches," said Burg.
The UK Meteorological Office has predicted a colder-than-average winter for much of Europe, while forecaster EarthSat said last week the US Northeast — the world’s largest heating oil market — would be much colder than last year.
The market also gained supply relief as oil workers in France and Nigeria ended their strikes.
Total’s Gonfreville oil refinery, the biggest in France, resumed operations on Saturday after workers agreed on Friday to suspend a month-long strike over wages, one of the factors that had helped prices stay well above $60.
And oil exports from OPEC-member Nigeria’s 240,000-bpd Brass River tanker terminal resumed at the weekend after protesting unions reached a deal with Italian energy giant Agip, a unit of ENI, ending a three-day disruption.
