The price of Brent crude oil dropped towards $59 a barrel on Monday as a result of a stronger US dollar and a record high in oil inventories.
Reuters reported that Brent was down 30 cents at $59.43 a barrel, and US crude was up 15 cents a barrel at $49.76.
The dollar reached an 11-and-a-half year high against other major currencies after US jobs data revealed that the unemployment rate declined to its lowest since May 2008 in February.
Oil inventories are increasing globally, outweighing geopolitical tensions in the Middle East and the threat of production cuts in Iraq and Libya.
Goldman Sachs analysts forecast that oil prices would revert after recent gains due to increasing worldwide inventories, with US crude expected to drop to around $40 a barrel.
Oil producers in the Organisation of the Petroleum Exporting Countries (OPEC) have decided to not cut production, despite oversupply in several regions, in order to defend their market share.
OPEC Secretary-General Abdullah al-Badri has said the group should not cut output to subsidise higher-cost shale oil, now being produced in large quantities in North America.
Oil prices declined by 60% between June 2014 and January 2015. They have, however, recovered by almost a third in the last two months due to supply disruptions in the Middle East, strong winter demand and large refinery margins.
Czech and Libyan officials announced that around 10 foreign workers are missing in the latest attack on Libya’s oil fields by Islamist militants, and there is a possibility they have been taken hostage.