West Texas Intermediate for June delivery slid as much as 51 cents to $47.31 a barrel on the New York Mercantile Exchange, and was at $47.54 as of 9:52 a.m. London time.
The plunge has also hit the share prices of major energy companies like ExxonMobil.
The pan-European FTSEurofirst 300 index .FTEU3 rose 0.69 percent and MSCI's gauge of stocks across the globe.MIWD00000PUS gained 0.36 percent after touching a record high.
Even so, Gene McGillian, manager of market research at Tradition Energy in Stamford, Connecticut, said, "We still have a near record overhang and signs of increasing production in areas of the world outside the producers that agreed to the cuts".
Those elevated inventory levels have weighed on sentiment in recent weeks, contributing to a sell-off in the oil market that shaved about $8 off the price of benchmark US crude in the last three weeks. Chinese iron ore futures fell nearly 7 percent in Shanghai after tumbling 8 percent on Thursday. and The Canadian dollar, the Australian dollar and Russia's rouble - some of the world's most commodity- sensitive currencies - were all sent spinning, falling respectively to 14-month, four-month and seven-week lows.
KEEPING SCORE: In Europe, France's CAC 40 was up 0.2 percent at 5,385 as investors remained hopeful that the centrist presidential candidate would win in Sunday's election.
Senior OPEC and non-OPEC officials have dropped strong hints that current production cuts will be extended for a further six months, but oil traders seem increasingly sceptical about the effectiveness of prolonging the curbs until the end of 2017.
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According to the data of USA, crude inventories fell 930,000 barrels, against the expectations of analysts for a decrease of 2.3 million barrels.
Crashing oil prices in late 2015 and early 2016 dealt a blow to the US shale industry.
ASIA'S DAY: Hong Kong's benchmark Hang Seng index lost 0.8 percent to close at 24,476.35 while the Shanghai Composite index in mainland China shed 0.8 percent to 3,103.04.
Oil is now near the psychological $45 level "which, if broken could send the oil pits into complete disarray and will likely have far-reaching consequences for both equity and currency markets near term", he added.
"At some point, the market should recognize Opec isn't the most important player in the market any more", said Commerzbank's Eugen Weinberg, "That is non-Opec, and, above all, United States shale". Markets in Japan and South Korea were closed for holidays. Taiwan's benchmark fell and Southeast Asian indexes were mixed.
The U.S. dollar hit its lowest level in roughly six months against the euro at $1.0999.
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