Light sweet crude for January delivery lost 39 cents to $US54.05 dollars a barrel in electronic trading on the New York Mercantile Exchange (NYMEX).
On London's InterContinental Exchange (ICE), Brent North Sea crude for January dropped 39 cents to $US53.53.
"All eyes will now be on OPEC's informal meeting in Cairo this weekend,'' said oil market analyst Nimit Khamar of Sucden brokers.
"OPEC have to show they are willing to continue cutting output in line with falling demand if they are to succeed in stabilising prices and a cut this weekend and then in December could go some way in achieving that.''
The Organisation of Petroleum Exporting Countries (OPEC) has watched oil prices collapse from record highs above $US147 in July, sparking serious concern among its members about plunging revenues.
OPEC ministers agreed in Vienna last month to reduce production by 1.5 million barrels a day from November 1 as they sought to defend prices.
But the market has since crumbled further, approaching the lowest levels for nearly four years on growing concern that a painful global recession could ravage demand for energy, traders said.
The OPEC cartel, which pumps 40 per cent of the world's oil, called two weeks ago for a meeting in Cairo as prices descended towards $US50.
However, ahead of the meeting OPEC President Chakib Khelil has downplayed the idea of an output cut being announced in the Egyptian capital.
The cartel may wait until a scheduled policy meeting due in Algeria on December 17 before announcing any change to output, according to traders.
"OPEC probably need to initiate further quota cuts of 1.0-1.5 million barrels a day before year-end to protect prices from sliding further,'' said DnB NOR oil market analyst Torbjorn Kjus.
Last week, Brent North Sea oil plunged to $US47.40 and New York crude touched $US48.35 , their lowest points for nearly four years.
That compared with their respective record highs of $US147.50 and $US147.27, forged July 11 on fears of supply disruptions.
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