Oil prices sank to their lowest in more than five weeks on Monday, a fall that could reduce the chances OPEC will agree to boost oil output at a meeting this week.
Oil fell nearly $10 last week from record highs of nearly $100 a barrel, pressured by concerns over the health of the U.S. economy and a recovery in the U.S. dollar.
By 10:32 a.m. EST U.S. light, sweet crude for January delivery was down 94 cents at $87.77 a barrel, above an intraday low of $87.47, its weakest since October 24. Brent crude was down 63 cents at $87.63.
The market will be very focused on Wednesday's OPEC meeting, but we believe they are unlikely to do anything, said Mike Wittner, global head of oil research at Societe Generale.
They have the same concerns as the market -- the possibility of weakening economic growth led by the United States.
Consuming nations have urged the Organization of the Petroleum Exporting Countries to pump more oil because stocks are shrinking ahead of peak winter demand.
But OPEC ministers say there is plenty of oil available.
There is absolutely ample supply, said Ali al-Naimi, Saudi Arabia's influential oil minister.
Prices slumped by $9.47 a barrel last week, the biggest nominal weekly loss ever, depressed by the prospect of an OPEC output increase, fears of a U.S. economic slowdown and a recovery in the U.S. dollar.
The weak dollar has contributed to oil's rise of about 40 percent since August, but there are now signs of the dollar bottoming out. Last week the U.S. currency rose 1.5 percent against a basket of currencies, boosted by the view that the U.S. Federal Reserve will rescue the flagging U.S. economy.
A Reuters poll early last week showed analysts expected another 500,000 bpd increase from OPEC, although oil's tumble since then may have clouded the picture.
The price collapse of last week could be seen as a lesser incentive for Saudi Arabia to sponsor a new increase, said Olivier Jakob, of oil consultants Petromatrix.
The world's top exporter convinced others in OPEC to agree a 500,000 barrel per day (bpd) increase in September.
OPEC oil output, excluding Iraq and Angola, fell short of the agreed level in November as field maintenance in the United Arab Emirates and Ecuador blunted the impact of a deal to raise supply, a Reuters survey found.
(Additional reporting by Jonathan Leff and Nick Trevethan in Singapore)