Brent and U.S. crude oil each fell more than $2 a barrel on Monday to a new five-year low amid a rising number of predictions that oversupply would extend well into 2015.
OPEC member Kuwait said Monday it expected prices to remain in the doldrums for about six months.
Prices continued to decline following a Morgan Stanley report that revised its oil price forecasts lower. In a report dated Dec. 5, Morgan Stanley said oil prices could fall as low as $43 a barrel next year. The U.S. investment bank cut its average 2015 Brent base-case outlook by $28 to $70 per barrel, and by $14 to $88 a barrel for 2016.
"Without OPEC intervention, markets risk becoming unbalanced, with peak oversupply likely in the second quarter of 2015," Morgan Stanley analyst Adam Longson said.
Brent for January was down $2.42 at $66.62 a barrel by 11:13 EST, its lowest since October 2009.
U.S. crude was down $2.27 at $63.55 a barrel, a session low, its lowest since July 2009.
“When these things go lower, they tend to go much farther than people anticipated,” said Tariq Zahir at Tyche Capital. “I definitely think we’re going to keep heading lower, everyone is trying to pick a bottom.”
At a meeting last month, top oil exporter Saudi Arabia resisted calls from poorer members of the Organization of the Petroleum Exporting Countries to cut production, driving a further slide in prices, which have lost more than 40 percent since June.
Cartel member Kuwait said on Monday oil prices were likely to remain around $65 a barrel for the next six to seven months.
Libya's state oil company said on Sunday the country was producing 800,000 barrels per day, though its El Sharara oilfield was closed due to a pipeline blockade.
The U.S. shale industry has yet to be hit by the slump in crude prices, Baker Hughes said in a report on Friday, reporting three new U.S. oil-drilling rigs had been added in the last week.
(Additional Reporting by Jack Stubbs in London, Manolo Serapio Jr in Singapore, Adam Rose in Beijing and Rania El Gamal in Kuwait; Editing by Christopher Johnson and Chizu Nomiyama)