New York's main contract, West Texas Intermediate for delivery in November, fell 52 cents to $101.52 in mid-morning trade, while Brent North Sea crude for November dipped 35 cents to $107.59.
Both WTI and Brent have fallen more than dollar from their closing levels on Friday as the shutdown raises concerns about the impact that 800,000 people told to stay away from work without pay would have on growth.
"The economic impact of the federal shutdown... All depends on how long it drags on and, in particular, whether the acrimonious stand-off in Congress spills over into the negotiations to raise the debt ceiling," Capital Economics said in a note.
With the government due to run out of cash on October 17 lawmakers must agree to raise the borrowing limit otherwise it will not be able to service its debts and in turn suffer a painful default, which would likely rattle global markets.
DBS Bank shot down talk that the shutdown was a "buying opportunity" and that it could be speedily resolved.
"Lest we forget, we also heard chatter that there would be a last minute deal to avoid the first shutdown in 17 years," it said in a note.
"Hence, it's better to get real and recognise that America has, so far, been long on promises, and short on delivery."
Markets today will also be watching the weekly report on US oil inventories. Analysts estimate commercial stocks rose 2.1 million barrels for the week ended September 27, according to a survey by Dow Jones Newswires.