Oil prices slid more than 4 percent to new 11-year lows on Wednesday as the row between Saudi Arabia and Iran made any cooperation between major exporters to cut output even more unlikely.
The furore over Saudi Arabia's execution of a Shi'ite cleric has stripped nearly 8 percent off the price of oil in the last three trading days, killing speculation that OPEC members might agree to production cuts to lift prices.
"There are rising stockpiles and the tension between Iran and Saudi Arabia make any deal on production unlikely," said Michael Hewson, chief market analyst at CMC Markets.
Evidence of slowing economic growth in China and India has meanwhile fueled fears that even strong demand elsewhere may not be enough to mop up the excess crude that has resulted from near-record production over the last year.
Benchmark Brent crude futures were at $35.07 a barrel at 1318 GMT, down $1.58 on the day, and reached their lowest since early July 2004, having staged their largest one-day drop in percentage terms in nearly five weeks.
U.S. crude futures were down $1.25 cents at $34.72 a barrel after slipping 79 cents the previous day.
Oil has slumped from above $115 in June 2014 as shale oil from the United States has flooded the market, while falling prices have prompted some producers to pump even harder to compensate for lower revenues and to keep market share.
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