Oil prices slid in early Asian trade on Wednesday after touching their lowest in nearly six years the previous session, with analysts predicting further falls as supply glut plagues the market.
Oil prices tumbled by 5 per cent to near six-year lows on Tuesday, with the Brent crude international benchmark briefly trading at par to US prices for the first time in three months as some traders moved to take advantage of ample US storage space.
February Brent crude prices had dropped by 40 cents since its last settlement to $46.19 a barrel by 08:08 am. US crude for February was trading 29 cents lower at $45.60 a barrel.
Analysts said prices would stay under pressure as oversupply of oil hurts both the American WTI contract and globally traded Brent, with some traders beginning to book ships for oil storage.
"Our latest forecast calls for Brent oil to average $45 per barrel during 1Q15 (the first quarter of 2015)," Nomura bank said on Wednesday.
Oil storage trends also imply further price falls, with US stocks possibly approaching 80 per cent of capacity by the upcoming spring season, according to US-based PIRA Energy Group.
"The last time the United States built inventories in December was in the middle of the financial crisis in 2008," the energy company said.
Outside the United States, some of the world's biggest oil traders have booked supertankers to store at least 25 million barrels at sea in recent days, seeking to take advantage of the crash in crude oil prices and make a profit down the line.
"Once floating storage starts, there is very little support on the downside for Brent spreads," Energy Aspects said.
US crude prices have been cheaper than Brent almost without interruption as soaring North American shale oil production pulled down prices while the rest of the world market remained more tightly supplied.
But with oil producer group Organization of the Petroleum Exporting Countries (OPEC) deciding late in 2014 against cutting it output despite slowing Asian and European economic growth and to defend its market share, including against surging US competition.
An oversupply of oil has also appeared outside the United States, pulling down Brent prices close to US levels.
"The closing gap looks to be solidifying Saudi Arabia's strategy to curb shale production and protect market share," ANZ bank said.