Brent crude oil price has fallen below $59 a barrel for the first time since May 2009.
After dropping below $60, the Brent price then fell to $58.50 a barrel, before recovering slightly to $58.94.
Oil prices have now nearly halved since June as a result of waning demand and increased supplies.
The latest fall was triggered by news of a fall in industrial activity in China, the world’s second largest consumer of oil.
The price of US crude fell by $1.73 to $54.18 a barrel.
At the weekend, the head of OPEC reiterated that the oil cartel would not try to shore up the oil price by reducing production.
While lower oil prices could provide a boost to many economies through cheaper fuel, the sharp drop in the cost of crude is affecting many oil producers.
On December 16, Russia dramatically increased its interest rate from 10.5% to 17% in an attempt to halt the slide in the country’s currency, the ruble.
The ruble has lost 50% against the US dollar this year as falling oil prices and Western sanctions continue to weigh on the country’s economy.
However, early signs were that the attempt to defend the currency had failed, with the ruble hitting fresh lows against the dollar.
With high levels of output from the US and no sign of a sustained economic recovery in Europe, most experts believe prices will remain low for the foreseeable future.
However, the low cost of crude may also make investment in some new wells uneconomical – which means prices could rise in the longer term.
Goldman Sachs has estimated that about $930 million of investment in new oil projects could be hit, given the recent plunge in oil prices.
Without this investment, new oil output could be cut by about 7.5 million barrels a day by 2025, or about 8% of current demand, the bank estimates.
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