International Brent crude oil futures LCOc1 briefly dipped below $60 per barrel before rising back to $60.33 at 0520 GMT, down 15 cents, or 0.3 percent, from their last close.
U.S. West Texas Intermediate (WTI) crude futures CLc1 were at $51.33 per barrel, down 30 cents, or 0.6 percent.
Saudi Arabia raised oil production to an all-time high in November, an industry source said on Monday, pumping 11.1 million to 11.3 million barrels per day (bpd) during the month.
Oil prices have lost almost a third of their value since early October, weighed down by an emerging supply overhang and widespread financial market weakness.
“The oil price correction has become a rout of historic proportions,” U.S. investment bank Jefferies said in a note on Tuesday.
“The negative price reaction is as severe as the 2008 financial crisis and the aftermath of the November 2015 OPEC meeting, when the group decided not to act in the face of a very over-supplied market,” it added.
Norbert Ruecker, head of commodity research at Swiss bank Julius Baer, said the weak sentiment “follows a surprisingly swift and pronounced change in the market mood from shortage fears to glut concerns,” while the world economy was also slowing down.
Traders said they were awaiting the outcome of the Group of 20 (G20) meeting in Buenos Aires and also the result of a meeting of the Organization of the Petroleum Exporting Countries (OPEC).
The leaders of the G20 countries, which make up the world’s biggest economies, meet on Nov. 30 and Dec. 1, with the trade war between Washington and Beijing atop the agenda. But with top crude producers Russia, the United States and Saudi Arabia all present, oil policy is also expected to be discussed.
The G20 meeting will be followed by OPEC’s annual meeting at its headquarters in Vienna on Dec. 6, when the producer cartel will discuss its output policy together with some non-OPEC producers, including Russia.
Saudi Arabia has been pushing for an OPEC cut, indicating it may reduce supply by 500,000 bpd.
“If this is from a November level of 11 million bpd, it is not particularly heroic,” Jefferies said.
In favour of low oil prices for consumers, U.S. President Donald Trump has put pressure on his political ally Saudi Arabia, OPEC’s de-facto leader, not to cut production.
Despite this, most analysts expect OPEC to start withholding some supply soon.
“We suspect that producers will start to withhold exports in the coming months, putting a floor under prices,” said Capital Economics in a note, adding that it expected Brent to be around $60 per barrel by end-2019.
Fereidun Fesharaki, chairman of energy consultancy FGE, warned that a failure by OPEC and Russia to significantly cut supply would mean crude prices would “fall further, perhaps to Brent at $50 per barrel and WTI of $40 per barrel or less.”