The price of oil briefly dipped below $50 a barrel for the first time in more than five years as evidence mounted that the world will be oversupplied with oil this year.
US oil dipped to $49.95 before quickly inching back over $50. In June last year it traded for $107 a barrel.
Oil has been falling for several months because global supplies are rising, especially in the US, at a time when weakness in the global economy is slowing the growth in oil demand.
Citigroup has cut its forecast for 2015 global oil prices as a result of high supplies.
The last time US oil traded below $50 was April 29, 2009.
Big UK supermarkets reduce fuel again
All four of the big UK supermarkets are cutting fuel prices again.
Asda, Morrisons and Sainsbury's are reducing their petrol and diesel by 2p a litre from today, while Tesco's similar 2p-a-litre cut has already taken effect.
The reductions mean Asda customers will pay no more than 105.7p a litre for petrol, with diesel being 112.7p a litre.
This is Asda's 14th fuel cut since the end of September, with 21p a litre coming off its petrol price in total and 17p a litre off its diesel.
For Morrisons and Sainsbury's it is the seventh cut since the beginning of December.
The RAC has predicted that petrol could dip as low as £1 per litre, although the AA is more sceptical.
RAC fuel spokesman Simon Williams said the latest cuts would further lower the average price of petrol, which is now cheaper than it has been for around five years.
He added: "The cuts are bringing us ever closer to the £1-per-litre average for petrol. Of course it would also be an extremely welcome move for motorists and businesses alike."
AA president Edmund King said: "Further drops in the pump price are extremely welcome. However, small rural towns are again being left behind by the price falls in the more competitive areas."
"This continues to feather the fall in the national average. We would love to see £1 per litre and we may possibly see it in many parts of the UK but it is unlikely that the average price will drop as quickly to the £1 level - partly because 70 per cent of the price is tax.
"There is still a price lottery out there so we advise drivers to shop around."
It came as oil tumbled to its lowest level since May 2009, with the price of a barrel of Brent crude slipping below $54. It has more than halved from more than $115 in June.
Connor Campbell, financial analyst at Spreadex, said oil's decline into the new year had been prompted by a raft of weak manufacturing data last week.
He said: "The black stuff is still looking abandoned and lost as 2015's trading begins in earnest, and continues to be a stain on the worldwide markets."
Shares in heavyweight oil firms BP and Royal Dutch Shell fell yesterday, with BP off three per cent and Shell by more than two per cent.