The sell-off resumed for oil prices on both sides of the Atlantic on Monday as concerns about a supply surplus and weak global demand accelerated, weighing on crude markets.

ICE February Brent, which recorded its second-largest annual drop since records began in 2014, dropped to fresh five-and-a-half-year lows. The international oil market hit a low of $52.66 a barrel in afternoon trading before recovering to $53.20 a barrel, down $3.22.

Nymex February West Texas, the US benchmark, dropped $2.29 to $50.40 a barrel, having earlier traded as low as $49.95 a barrel — the first time since April 2009.

Opec’s decision at the cartel’s November meeting to hold production at 30m barrels a day deepened an oil price rout that had been gathering pace since mid-June.

The budgets of the world’s largest oil producers, from Venezuela to Russia, have been put at risk while the share prices of international energy companies have suffered huge losses.

Opec has been battling a demand squeeze amid “anaemic global growth”, a drive by governments to meet emissions targets and an upsurge in production from rivals, said David Hufton, chief executive at broker PVM.

A strong US dollar had also put producer countries under pressure, Mr Hufton said. Commodities such as oil that are priced in dollars are more expensive for buyers who use other currencies.

“[It] is very plain for all to see that oil supply growth exceeds oil demand growth and from a producer point of view this imbalance has to be rectified,” he added.

Even as recent conflict in Libya has reduced output, Russian production has reached record levels and Iraqi exports have hit highs last seen in 1980, only adding to concerns about an oversupply.

“New supply has entered the market, offsetting Libya outages,” said Adam Longson, oil analyst at Morgan Stanley, adding that there was little to support the oil price.

He said a potential nuclear agreement with Iran could spur increased production from Opec nations.

Meanwhile, Saudi Arabia — the cartel’s largest producer and de facto leader — shows “few signs of capitulation” and is likely to stand by its stance of maintaining output at existing levels, Mr Longson added.

State-owned oil company Saudi Aramco said on Monday that it would cut February export prices for all oil grades to Northwest Europe. At the same time, it increased prices for Asian customers — its major selling market — after several months of steep cuts.

Price cuts by Saudi Arabia have been interpreted by some market participants as a sign that the Kingdom will no longer take action to boost prices in a fight over market share. Others have said the price differentials are more a reflection of general market weakness.

Both major benchmarks have plunged more than 50 per cent since the middle of 2014 on the bearish sentiment.

The “contango” structure in Brent and Dubai crudes — market jargon for when prices for future delivery exceed spot prices — are steep and are only expected to widen.

This means that after years of low volatility and poor moneymaking opportunities, traders and banks will be eyeing storage plays, said analysts.

Vitol, Trafigura, Mercuria and Glencore, alongside some of the world’s biggest banks, sought out an almost risk-free profit from the “supercontango” of 2008-2009 when they bought crude at cheaper rates, stored it in onshore or offshore facilities and sold it on at a later date at higher prices.

The price of Brent crude for delivery in six months stands at more than $5 a barrel higher than current levels.

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