The price of Brent oil has plunged under USD 50 a barrel for the first time in the past five and a half years amid growing oversupplies in the market.
Benchmark North Sea Brent crude for February delivery fell more than a dollar to USD 49.92 a barrel on Wednesday trading to hit levels last seen in May 2009.
US oil for delivery in February also plunged 75 cents to under USD 47.20 a barrel, the lowest since April 2009.
“The risks to oil prices remain skewed to the downside in the near term,” ANZ bank said in a note on Wednesday.
“While we expect high-cost shale producers to be the first to cut production, this is unlikely to occur until the middle of 2015,” it added.
On Tuesday, oil futures had tumbled to fresh multi-year lows in another stormy day for global financial markets.
This came a day after Saudi Arabia cut oil prices to its European and US customers in order to maintain market share.
Oil has lost more than 50 percent of its value since June last year over a global supply glut, certain major oil producers such as Saudi Arabia, and slowing growth in major world economies that has hurt demand.
The Organization of the Petroleum Exporting Countries (OPEC), which pumps out about 40 percent of the world’s oil, has so far refrained from cutting its production to balance the market mainly due to opposition from Saudi Arabia.