The price of Brent crude oil fell below $54 a barrel on Tuesday, after concerns over an increasing supply glut.
Reuters reported that Brent dropped 35 cents to $53.59, and US crude fell 47 cents to settle at $43.41 a barrel.
Morgan Stanley was quoted by the news agency as saying: "The oil market is currently oversupplied, driven in part by the success of North American shale.
While the US rig count fell to 1,125 last week, from 1,809 rigs a year ago, past cycles have shown there is often a lag between when drilling stops and when oil supply stops growing.
Vitol chief executive of oil trader Ian Taylor stated that oil prices could increase slightly as the oil markets "come into balance".
Traders are awaiting information on US crude inventories for price direction. A poll by Reuters has found that stocks will likely rise to a record high for a tenth week.
The American Petroleum Institute and the US Department of Energy’s Energy Information Administration are due to release their weekly reports.
Oil markets also reacted to the possibility of a nuclear agreement that may end sanctions against Iran, enabling Tehran to send further oil into the market.