And on Wednesday, the three top global ratings agencies slashed their rating on AIG by at least two nothces, adding more downgrades could follow.

Following crude oil's sharp losses -- down 20 per cent since the start of the month -- technical analysts now focused on support below $90 a barrel and into the $85 to $80 a barrel region for the next leg lower.

RESTARTING AFTER IKE

A big chunk of US energy production shut by Hurricane Ike could restart within a week, with the only reports of damage to refineries so far included Shell's Deer Park Plant and ConocoPhillips' Alliance refinery.

Nigerian militants on Monday attacked oil facilities, killing a guard and forcing evacuation of nearly 100 workers, in a third day of fighting with security forces that has disrupted oil output.

The focus later on Tuesday shifts to the US Federal Reserve, which is expected by many analysts to keep interest rates on hold, although after Monday's Lehman shockwaves investors are pricing in a significant chance of a quarter-point rate cut aimed at calming roiled markets.

The result of its meeting is expected to be announced at around 2:15 p.m. EDT (1815 GMT).

The market is also looking ahead to Wednesday's US oil stocks data, expected to show a 3.4 million barel draw down in crude inventories, a 2.0 million barrel drop in distillate supplies and a 4.0 million barrel decline in gasoline stocks.