Oil Falls Below $50 a Barrel at New Five-and-a-Half-Year Low

The price sign outside Costco in Westminster, Colorado, shows gas selling for $1.81.9 for the first time in years, December 23, 2014. Rick Wilking/Reuters

Oil prices sank to fresh 5-1/2-year lows on Tuesday, extending losses after a 5 percent plunge in the previous session as worries over a global supply glut intensified.

Brent crude fell by 3 percent to below $52 a barrel, while U.S. crude went below $50 a barrel, as cuts to monthly oil selling prices for European buyers by top OPEC producer Saudi Arabia heightened worries about oversupply.

"Saudi Arabia is showing no signs of pulling back," said Bjarne Schieldrop, chief commodity analyst with SEB in Oslo. "Stocks are continuing to build, and there is an increase in contango."

While Saudi Arabia increased its selling price to Asia, some analysts said the cuts to Europe reflect the kingdom's deepening defense of market share.

This added to bearish data over the weekend showing that Russia's 2014 oil output hit a post-Soviet-era high and exports from Iraq, OPEC's second-largest producer, reached their highest since 1980.

On Tuesday, the UAE's Abu Dhabi National Oil Company (ADNOC) set the December retroactive selling price for its benchmark Murban crude at $60.65 a barrel, its lowest level since May 2009.

"It's hard to pinpoint a specific downward pressure," Schieldrop said.

Brent crude fell as low as $51.23 a barrel on Tuesday, its lowest level since May 2009. It was trading at $51.31 at 0942 GMT (0442 ET), down $1.80.

U.S. crude was at $48.54, down $1.50, after falling to $48.47, its lowest since April 2009.