Oil dropped below $50 today for the first time in three years.
Brent crude futures hit $48.73 barrel today.
In New York, light sweet crude for delivery in December was at $50.20 a barrel - the lowest level since January 2007.
The oil price peaked in July at $148 a barrel.
The sudden drop in oil prices has caught many unprepared. The fall has come from lower demand, which in turn is due to the economic slowdown and reaction to the record highs recorded earlier in the year.
This month the oil cartel Opec agreed to cut production to bring up prices, but this has failed to create a reaction.
Data from the US Energy Department yesterday show US fuel use in the last month was down seven per cent.
But prices are expected to swing back up. Goldman Sachs yesterday cut its 2009 forecast to $86 a barrel from $80.
Paul Harris, head of natural resources risk management at Bank of Ireland Global Markets, explained prices could now swing back up, but demand is limited in an economic slowdown.
"Upside potential remains capped however as the true extent of the global economy is revealed," he said.
"However, as we enter into the peak demand period below average temperatures across North America will underpin demand for heating oil products and associated distillates which will at least lend base support to the market.
"Continued turmoil in the financial markets with the ongoing 'dash to cash' will maintain volatility in the oil markets, keeping the focus very much on the demand side for the present."