Brent crude sank below $100 a barrel for the first time in nine months on Tuesday, extending a recent rout triggered by data from China and the United States that weakened the outlook for demand.
Earlier in the session, the dismal outlook pushed gold to a more than two-year low and shaved over $2 off oil prices. As the day progressed, gold and precious metals bounced back, but oil was unable to move into positive territory.
Brent crude for June delivery was down $0.69 at$99.94 per barrel by 1215 GMT. It earlier reached as low as $98.00, the lowest since July 2012.
US crude for May delivery was down 21 cents to $88.50 a barrel after hitting a low of $86.06, its weakest since December 2012. Both were set for their longest losing streak since December.
Brent crude on Monday dropped about 3 percent after data showed economic growth in China, the world's second-largest oil consumer, had unexpectedly slowed in the first three months of 2013.
This rattled oil markets already spooked by forecasts for lower global oil demand growth.
"Somewhat disappointing Chinese GDP data yesterday might have contributed to the bearish sentiment in the oil futures markets," analysts at JBC Energy said.
"However ... Monday's sell-off across virtually all commodities and equities markets and the extent of losses in some markets is difficult to justify on fundamental grounds solely, with herd behaviour and momentum trading contributing," JBC Energy said.
Ian Taylor, head of top world oil trader Vitol, said oil prices were unlikely to fall much further in the near term.
"I think it has done what it is going to do for a while," the Vitol group president and chief executive said.
Analysts supported Taylor's view.
"A continued price slide is unlikely, for this would prompt OPEC to reduce supply in a bid to shore up the price. At an oil price of below $100 per barrel, some OPEC producers find it difficult to finance their national expenditure through oil revenues," analysts at Commerzbank said.
Speculation that Saudi Arabia might seek to limit output should prices continue to fall "seems to be the only shred of support currently, but there have been no talks yet," a trader said.
Adding to the gloom was a US regional manufacturing report showing the pace of growth slowed more than expected in April and other data showing US homebuilder sentiment waned for the third month in a row in April.
This comes on the heels of bleak retail sales data last week and suggests the world's largest economy has lost some steam heading into the second quarter.
In the euro zone, annual inflation fell to 1.7 percent in March, in line with market expectations but still lower than the European Central Bank's target of close to 2 percent, data from the EU statistics agency showed on Tuesday.
Goldman Sachs, one of the most influential banks in commodity markets, recommended clients close their bets on rising Brent prices, warning the market could continue to fall.
A bombing at the finish line of the Boston Marathon added to the market volatility.
The oil market was waiting for weekly oil inventory data from the United States for trading cues.
A preliminary survey of analysts by Reuters forecast US crude stocks rose by 1.4 million barrels for the week ended April 12.