The US oil benchmark, West Texas Intermediate (WTI), has fallen under $30 per barrel for the first time in over a week as rumours of a production cut deal between Opec and non-Opec members diminished.
Brent crude was trading around $32.61 when WTI dipped under the psychological $30 barrier.
WTI, also known as Texas light sweet, came into price parity with the international benchmark Brent crude late last year after the US lifted its export restrictions but has since drifted from Brent.
There have been rumours over the last week that Opec and Russia would meet to agree an oil price production limit, though these have now been dismissed by the cartel.
Last week Russian minister Alexander Novak suggested a deal to cut global production by five per cent was on the table.
Analysts have warned though that any global deal would have to involve the US due to the country's increased market share.
The oil price has been falling for the past 18 months as a supply glut continues to erode the price, hitting lows of $27 per barrel in mid January.
The Saudi led Organization of the Petroleum Exporting Countries (Opec) has been unable to reach agreement on whether to enact an oil production ceiling due to the boom in shale production in the US, and increased production from Russia.
Saudi Arabia has said wants the oil price to come inline with the cost of production after years of an artificial oil production ceiling propping up the price and allowing expensive oil producers in the US and Russia to take market share.
Saudi can produce a barrel of oil for significantly lower cost than its rivals, though reports differ over how much each barrel costs the country.
If Saudi owned Aramco, the worlds largest oil producing company with reserves rumoured to be over 260bn barrels - 10 times more than Exxon Mobil - goes ahead with a planned stock market floatation its costs will have to become clearer.
Officials say the company is worth "trillions of dollars" - though it reveals no information on revenues.