Oil prices fell below $39 on Tuesday on a string of data confirming U.S. economic downturn.
U.S. crude for February delivery fell $1.55, or about 3.7 percent, to $38.36 a barrel after falling 6 percent on Monday.
ICE Brent dropped by $1.90 to $39.55 a barrel.
The world's top economy, the United States, shrank an unrevised 0.5 percent in the third quarter, official data showed. Consumer spending plunged 3.8 percent, the biggest drop since 1980.
The UK economy shrank for the first time since the early 1990s in the third quarter and by more than expected, data showed on Tuesday, with gross domestic product contracting 0.6 percent. Spain and New Zealand languished in recession.
"The bears appear to be in control, aided by weak equity markets as the global economic slump offers a depressive ring to the festive period," said Rob Laughlin, senior oil analyst at MF Global in London.
The most dramatic decline ever in Japanese exports has also increased anxiety about the condition of the world economy.
OPEC
Signs that oil demand is likely to contract for the first time in a quarter century have already knocked oil prices over $100 off their July peaks.
The Organization of the Petroleum Exporting Countries has cut about 5 percent of world supplies to counter the collapse in demand, last week agreeing an unprecedented 2.2 million barrels per day reduction and appears ready to do more if needed.
OPEC could decide in mid-January to hold an extraordinary meeting before March if it sees that global oil prices continue to slide because of weakening demand, OPEC's President Chakib Khelil said on Tuesday.
"We will review the market again and make a proper decision if we see that prices still continue sliding despite the compliance," Khelil told Reuters in Moscow on the sidelines of a meeting of Gas Exporting Countries Forum (GECF).
Robust demand from emerging markets such as China pushed oil prices to their peak above $147 in July. Now even the dynamic Asian economies appear to be suffering.
Apparent oil consumption in China fell by 3.2 percent in November from a year ago, the first decline in nearly three years, Reuters calculations confirmed this week, while crude imports into the world's No. 2 energy consumer dropped to the lowest level this year.