Brent crude was being traded at below $50 a barrel for the first time since 2009 today as the rout in global oil prices continued.
The industry benchmark has slumped from $116 a barrel in June,driven by a glut in supply and shrinking demand due to fears over the outlook for world economic growth.
Brent was down by another 2% in trading today, putting more pressure on the shares of FTSE 100 Index heavyweights BP and Royal Dutch Shell.
James Hughes, chief market analyst at Alpari, said: “Many will be asking just how much lower the oil price can go before some kind of stabilising effect kicks in. However, after every $10 fall experts have been calling the end of the slide but have seen it continue to drop like a stone.
“Traders will be looking for the 40 dollar level now as a base for the oil price but after further comments from Saudi Arabia yesterday hinting of still no move to curb output, then no one would be surprised to sees us drop yet lower than that level.
“Break-even prices and fracking costs have long been broken and it now almost seems we will keep going lower until the members of the Opec cartel literally can no longer afford a slip in prices.”
Shippers, airlines and motorists stand to gain from the fall and Bank of England governor Mark Carney said last month that the oil price slide was a “net positive development” for the UK.
A combination of the US shale boom and weakness in the global economy -with the eurozone stagnant and Chinese growth slowing – has resulted in supply outpacing demand.
The oil price came under sustained pressure in November when, despite this, Opec ministers decided not to cut supply.
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