US light sweet crude fell $1.07 to 111.80 a barrel, while in London, Brent crude slipped by $1.06 to $110.88.

Analysts have also predicted further losses ahead as demand is crimped by the current economic slowdown.

Oil is not the only commodity affected by economic woes. Metals have fallen from record highs, amid fears a global slowdown will dent demand.

Platinum has so far borne the brunt of such concerns, mainly on the back of slowing car sales. More than half of the world's supplies of the white metal are used in catalytic converters.

Other industrial metals such as copper, which is used in the building and power sector, have also been hit hard.

On Tuesday, platinum was down 6%, gold more than 2% and silver more than 5%.

Falling oil prices have also been weighing on precious metals - particularly gold - as many investors buy it as a means to protect themselves from oil-led inflation.

Future falls?

Looking ahead, many analysts believe oil prices could fall even further, with US figures due out on Wednesday expected to show a rise in stockpiles, underlining the decline in demand.

Meanwhile, last week's figures from Opec also hinted that global demand for oil is set to slow.

The oil cartel's monthly report predicted global oil demand would grow by one million barrels a day in 2009 - 30,000 barrels lower than its previous forecasts, and its lowest growth since 2002.