Oil fell to fresh lows not seen since May 2009 on Friday with U.S. crude prices slipping below $58 a barrel on concerns over a global supply glut and weak demand.
U.S. WTI crude settled down $2.14 at $57.81 per barrel, the lowest since May 2009. The contract has lost about 11 percent this week.
Brent crude was down nearly $2 at $62 per barrel and earlier hit a low of $61.35—the lowest since July 22, 2009.
Down 33 percent already, it is on track for its biggest quarterly drop since the fourth quarter of 2008. Brent is down more than 9 percent this week, taking its fall since a June peak above $115 to 45 percent.
The International Energy Agency (IEA) said oil prices would likely come under further pressure, cutting its outlook for demand growth in 2015 and predicting that non-OPEC output gains would increase global supplies.
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The IEA, which coordinates the energy policies of industrialized countries, cut its outlook for global oil demand growth for 2015 by 230,000 barrels per day (bpd) to 900,000 bpd on expectations of lower fuel consumption in Russia and other oil-exporting countries.
"It spells out the main scenarios that are in the market and said that stockpiles will be substantially bigger in the first half of 2015," said Bjarne Schieldrop, chief commodity analyst for SEB in Oslo.
The Organization of the Petroleum Exporting Countries (OPEC), which accounts for a third of world oil output, sees 2015 demand falling to its lowest in more than a decade.
"It's following the trend lower. The market has reacted strongly to the OPEC forecast cut, and it is focusing only on the negative," said Hans van Cleef, senior energy economist at ABN Amro in Amsterdam.
He added there was little technical support until $50-$55.
Energy companies cut 29 oil drilling rigs in the United States this week, the most in two years, as oil prices kept sliding, bringing crude down 47 percent since June, data showed on Friday.
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Remarks by Saudi Arabia's oil minister reiterating that the kingdom would not cut output, and a surprise jump in U.S. crude and distillate inventories, have also helped drive down prices this week. Analysts said there was scope for oil to slip further.
"We are getting quite close to excess supplies which could push prompt Brent (prices) down to incentivise traders to store increased volumes of crude on ships, as onshore storage fills up," Abhishek Deshpande, an analyst at Nataxis told the Reuters Global Oil Forum. He said oil could briefly fall as low as $40 per barrel.
Saudi Arabia pumped 9.610 million barrels of oil per day in November, some 80,000 bpd less than its production in October, an industry source said on Friday. But the amount of crude supplied to the market inched slightly higher to 9.420 million bpd, which is 40,000 bpd more than in October, the source told Reuters.
Earlier, China released data showing near-record refinery runs in November, with factory output growth weaker than expected. High Chinese oil demand, which has remained above 10 million bpd for the past three months, could help provide a price floor.
The number of rigs drilling for oil declined to 1,546 in the week to Dec. 12, according to data from oil services firm Baker Hughes. Twenty-one of the 29 rigs that were cut were in the Permian Basin.
The number of rigs has declined in six of the last nine weeks since hitting a record high of 1,609 in mid October.