Singapore - Brent crude fell to just above $88 a barrel on Tuesday in a well-supplied market as expectations faded that Opec could cut output in an effort to shore up prices.
The global oil benchmark has declined more than 20% from the 2014 high in June as supplies rose and demand slowed in the United States, Europe and China.
Investors expecting a production cut from Opec to support prices were disappointed as Saudi Arabia and Kuwait played down the possibility of the Organisation of the Petroleum Exporting Countries (Opec) reducing output.
Opec, which produces about 40% of the world's crude oil, is due to meet late in November to discuss output targets.
"There's been market chatter that Saudi Arabia is unlikely to cut production in the November meeting so that's probably playing on the market," said Ankit Pahuja, a commodity strategist at ANZ in Melbourne.
"Seasonally, it's a weak point. We think there's more scope for recovery in November and December."
Brent crude fell 52 cents a barrel to $88.37 by 08:45 after touching $87.74 on Monday, the lowest since December 2010. The November contract expires on Thursday.
US crude dropped 48c a barrel to $85.26 after it pared sharp intraday losses on Monday to settle down 8c.
"There was probably some positivity that came out of the China data yesterday," Pahuja said. Underlying oil demand in the world's top energy consumer was still "quite strong", he said.
China posted a strong rebound in commodities imports in September, including a 13% rise in crude oil imports compared with August.
Despite the recent price slump, some analysts expect oil markets to recover ahead of peak winter demand in the Northern Hemisphere.
"We see the potential for a positive bounce into year-end, particularly given extremely bearish sentiment and positioning," Morgan Stanley analysts said in a note.
"Even if Opec is not overly responsive before year-end, which we expect, fundamentals have turned, which should eventually lift crude prices."
Investors are looking ahead to weekly oil inventories data from the United States for price direction.
US commercial crude stocks were forecast to have increased in the week ended October 10, while refined products likely fell, according to a Reuter’s survey ahead of the inventory reports out of the world's biggest oil consumer.
Industry group the American Petroleum Institute (API) will issue its report on Wednesday, and the US Department of Energy's Energy Information Administration (EIA) will follow with its weekly data on Thursday. The reports have been delayed a day due to Monday's Columbus Day holiday.