US crude oil fell below the significant milestone of $50 a barrel for the first time in five-and-a-half years on Monday 5 January as supplies continued to soar.
Brent crude oil also fell, trading below $53 a barrel at one stage, meaning both Brent and West Texas Intermediate oil have lost half of their value since the summer of 2014.
The slump comes after some of the world's top suppliers reported record production results and plans to boost production further.
Russian government data showed its production rose to a post-Soviet high in December while Iraq, the second-largest producer in the Organisation of Petroleum Exporting Countries (Opec) cartel, announced plans to increase its crude exports to a record level in January.
The increase in supplies from the two producers has surprised some analysts, as the two countries are combating severe geopolitical challenges.
Russia remains embroiled in a conflict with world powers over its role in the Ukraine crisis, while Iraq faces an existential threat to its borders after militants aligned with the Islamic State seized and occupied territory in the north of the country.
Iraq plans to expand production to 3.3 million barrels of oil per day, the country's oil ministry told Bloomberg on Sunday. Baghdad exported 2.94 million barrels per day in December, the highest level in decades.
Crude oil prices are likely to remain around current levels in the near term, according to experts, who cite the needs of US shale producers to keep prices around $60 a barrel.
"If you go much below 60 then shale producers start to get in real trouble. If you go much above, then shale producers start to ramp up output," Capital Economics commodities economist Tom Pugh told IBTimes UK via telephone on December 23.
Falling oil prices have come as some of the world's biggest economies have seen their demand for oil drop, helping to drive down share prices of leading oil companies in recent months.