For the first time in 14 months, the price of Brent crude dropped below $100 a barrel, following the weak US jobs data and Chinese import growth data.
Reuters reported that Brent declined to $99.95 a barrel while US crude dropped 60 cents to settle at $92.69 a barrel.
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Oil prices have declined from a peak of $115 in June due to weak economic growth and a glut in supply.
This news is bound to increase pressure on the budgets of exporters and may encourage some oil producing countries to restrict the supply in an effort to control the prices from spiralling further downwards.
The Chinese import growth declined for the second consecutive month in August due to a dip in domestic demand.
On the other hand, the US jobs data showed an increase of approximately 142,000 in August, but it is still way below the expected 225,000, raising concerns on the growth pace of the biggest oil-consuming country of the world.
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By GlobalDataHowever, the dip in prices is said to be a temporary phenomenon.
Reuters quoted an OPEC delegate from a Gulf country as saying: "The fall in prices is a temporary thing. They are still within the acceptable range.
"We are now approaching winter so the prices are expected to rise," said the delegate.
Investors are keeping a close watch on the geopolitical concerns in Europe and the Middle East and the impact these tensions could have on the oil demand in Europe.
The EU is likely to impose further sanctions against Russia over the Ukraine crisis, which could be aimed at oil company Rosneft, units of Gazprom and 24 individuals, the news agency reports.
