Benchmark Brent crude oil futures fell $2.31 a barrel, or 3.7 percent, to a low of $60.29, its lowest since November 2017. By 1050 GMT, Brent was trading around $60.75, down $1.85.
U.S. West Texas Intermediate (WTI) crude futures lost $2.90, or 5.3 percent, at one point to touch a low of $51.73 a barrel.
"The question is now how much longer bears are able to keep firing. Are they going to run out of ammunition shortly or they have ample supply of bullets?" PVM Oil Associates strategist Tamas Varga said.
"It is reasonable to compare the current economic and supply/demand picture with the one four years ago. After all, it was in November and December 2014 when oil prices fell more or less to the same level where they are now," he said.
Volatility has spiked to its highest since late 2016, as investors have rushed to buy protection against further steep price declines.
Volatility, a measure of investor demand for a particular option, has jumped above 60 percent for very bearish near-term sell options, double what it was two weeks ago.
Global oil supply has surged this year. The International Energy Agency expects non-OPEC output alone to rise by 2.3 million bpd this year, up from its forecast six months ago of 1.8 million bpd..
Demand next year meanwhile is expected to grow at a rate of 1.3 million bpd, compared with a forecast of 1.5 million bpd six months ago.
Adjusting to lower demand, top crude exporter Saudi Arabia said on Thursday that it may reduce supply as it pushes OPEC to agree to a joint output cut of 1.4 million bpd.