Oil prices dived to their lowest points since mid 2005 amid worries over mild US winter temperatures and expectations US inventory data will show further gains in US fuel stocks.
Oil prices, which have now lost some 11 per cent since the start of the year, are also under pressure from speculation energy-based funds are losing interest in oil.
Earlier this afternoon in London, front-month Brent North Sea crude contracts for February delivery plunged $1.73 to $53.87 a barrel, after earlier hitting an intra-day low of $53.64 - the lowest point since June 2005.
Front-month New York light sweet crude contracts for February delivery dived $1.94 to $54.14 a barrel. The contract earlier hit an intraday low of $53.88 - its lowest since June 2005.
Last November, Opec cut output by 1.2 million bpd. Late last year, the cartel also agreed to a further 500,000 bpd cut in output, effective from February 1st this year. However, data has since shown cartel members did not comply fully with the cuts.