Brent crude settled at a four-year closing low of $72.82 a barrel in Asian trading. Early Friday, Brent rebounded slightly to trade around $73 a barrel.
U.S. crude plunged 6.9 percent to $68.59. In early trading Friday, U.S. crude dipped to $69.31.
"In the short term, given market skepticism that recent price levels are low enough to substantially slow U.S. output growth, we expect price levels to drop below $70/bbl for Brent and even lower for WTI (U.S. crude)," Barclays analysts said in a note.
MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.4 percent, on track for a weekly gain over 1 percent but a monthly loss of more than 1 percent.
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Australian shares skidded 1.3 percent, with energy companies taking a hammering, led by Sundance Energy, Drillsearch, Santos, falling 10-16 percent.
Prior to the opening bell in New York, shares of Exxon Mobil, Chevron and ConocoPhillips were down nearly 5 percent, while BP shares were off more than 6 percent. Oilfield-services companies were also hit hard, with Transocean skidding more than 8 percent.
U.S. stock futures were trading mostly lower, as markets reopen on Friday for a shortened session which will end at 1 p.m. ET. Volumes will likely be low as it is Black Friday. (Track US stock index futures here.)
The Nikkei stock average bucked the regional downtrend and added 0.7 percent in early trading, on track for a slight weekly drop but a hefty monthly gain of over 5 percent.
A spate of Japanese data released earlier on Friday contained some positive economic news. Japan's industrial output unexpectedly rose 0.2 percent in October, marking a second straight month of gains. Core consumer prices rose 2.9 percent in October, in line with forecasts, while the jobless rate fell and the availability of jobs edged higher last month.
The dollar rose about 0.3 percent against the yen to 118.08 yen, while the euro drifted down about 0.1 percent to $1.2452.
But the greenback made dramatic moves against the currencies of oil-rich countries. The dollar rallied to 6.9501 Norwegian crowns, a high not seen in over five years, and was last at 6.9442.