Oil has dropped in price by nearly 6% to below $40 a barrel on signs a global economic malaise was slowing fuel demand further.
US crude for February delivery settled down $US2.45 at $US39.91 per barrel on Monday. The January contract touched $US32.40 on Friday before expiring - the lowest since February 2004.
London Brent crude settled $US2.55 lower at $US41.45 per barrel.
China on Monday cut interest rates for a fifth time since September and Japan warned it was sliding deeper into a recession.
Oil prices have fallen more than $US100/b since reaching a record on $US147.27 per barrel on 11 July.
The Organization of the Petroleum Exporting Countries last week agreed to reduce output by another 2.2 million barrels per day in addition to cuts of 2 million bpd since September to help balance the market and prop up prices.