Global oil prices slipped under the $40 per barrel mark today, putting it on course for its biggest weekly slide in two months.
Brent crude, the global benchmark, fell 1.6 per cent to $39.81 per barrel this morning. Meanwhile, West Texas Intermediate crude, the US benchmark, slumped 1.9 per cent to $39.05.
The oil price was driven lower by soaring US crude stockpiles in the US and a weaker dollar.
Data released yesterday by the Energy Information Administration showed US crude oil inventories increased by 9.4m barrels last week to a record 532.5m.
This was much more than analysts expected, with many having pencilled in an uptick of 3.1m according to Reuters.
"The (US inventory) data prompted profit-taking while hawkish rhetoric from Fed officials has pushed up the dollar," said Michael Hewson, chief analyst at CMC Markets, said.
Oil is priced in dollars, and a strong greenback makes it more expensive to buy using foreign currencies, dampening demand.