Oil hit its lowest price in five and a half years

Russia's oil output hit a post-Soviet high last year, averaging 10.58 million barrels per day (bpd), up 0.7 percent thanks to small non-state producers, Energy Ministry data showed.

Iraq's oil exports were at their highest since 1980 in December, an oil ministry spokesman said, with record sales from the country's southern terminals.

But oil producer group OPEC has decided not to cut output, opting to let the market find its own level.

The two oil benchmarks - Brent and West Texas Intermediate - have now lost more than half of their value since mid-2014. Brent crude for February dropped as low as $55.25 a barrel, its weakest since May 2009, before edging back to $55.67, down 75 cents, by 0815 GMT.

U.S. crude slid to $51.40 a barrel on Monday, also its lowest since May 2009, before recovering a little to trade around $51.90.

"It's hard to see much improvement in oil fundamentals near term," Morgan Stanley analyst Adam Longson said.

"New supply has entered the market, offsetting Libya woes. Additional exports are coming primarily from Russia and Iraq."