Brent crude plunged below $57 per barrel briefly on Tuesday, marking a new five-and-a-half-year low as traders bet that the global oversupply of oil will continue deep into 2015.
The benchmark has fallen more than 45pc since June and is on track for its worst year since 2008, while oil traded in the US is now poised to crash through the $50 per barrel level.
"Oil bulls are having another hard week as Brent oil dropped to $56.90, a new five-year low, as lingering worries over supply excess overwhelmed fear of Libya supply disruptions," said Peter Rosenstreich, head of market strategy at Swissquote.
Crude prices have plummeted since the Organization of Petroleum Exporting Countries (Opec) agreed in November to leave its production quotas unchanged at 30m per day, effectively triggering a price war with producers outside the Middle East-dominated cartel.
Opec countries led by Saudi Arabia - which pump a third of the world's crude - are concerned about the loss of market share to shale oil drillers in the US and ballooning supply outside the group.
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