Oil fell below $120 a barrel today, pressured by evidence of rising Opec output in the midst of declining demand in the United States and Europe.
The losses, adding to a record slide from the mid-July peak over $147 a barrel, came despite a storm in the Gulf of Mexico that was curbing oil production, shipping and refining.
US light crude fell $4.10 to $121.00 a barrel after slipping as low as $119.50. London Brent crude dipped $3.55 to $120.63 a barrel.
The losses came after a Reuters survey showed Opec supply rose for a third consecutive month in July mainly because of increased output from the world's top exporter Saudi Arabia.
The boost in production from Opec comes as soaring energy prices and an economic slowdown cut into consumption in the United States and Europe.
The bearish impact was countered by Tropical Storm Edouard, which was barreling across a major oil and gas producing area of the northern Gulf of Mexico.
The storm affected shipping and port operations, triggered evacuations and minor production outages offshore, and forced at least one refinery along the coast to shut.
The storm is expected to come ashore at close to hurricane strength tomorrow on the Texas-Louisiana coast.
Traders also were nervous supplies could be disrupted as a result of tension between the West and the world's fourth largest oil producer, Iran.
The head of Iran's revolutionary guard was quoted as saying Iran could close the Straits of Hormuz, a key Gulf shipping route, if it were attacked over its nuclear programme.
Reuters