Oil Dives 4% To Five-Year Low As Selling Snowballs

"Without OPEC intervention, markets risk becoming unbalanced, with peak oversupply likely in the second quarter of 2015," Morgan Stanley analyst Adam Longson said.

Thus far, there appears little sign of intervention, even after oil prices dropped 15 percent, or nearly $12 a barrel, since the Organization of the Petroleum Exporting Countries opted not to cut production at its Nov. 27 meeting.

Top exporter Saudi Arabia has resisted calls from poorer members to curb output and shore up prices that have slumped more than 40 percent since June.

It is unclear how soon the price slump will slow the U.S. shale boom. The number of onshore rigs drilling for crude oil remains relatively high, and new U.S. projections released on Monday show production from the big three U.S. shale plays should carry on growing at over 100,000 barrels per day into January.

However, many companies are already starting to make deep cuts to spending for next year. On Monday, Conoco said it would slash spending by 20 percent, or $3 billion, the biggest reduction thus far announced by U.S. drillers.

Analysts at Standard Chartered said they expect drilling activity to fall "significantly" within two months.

(Additional reporting by Jack Stubbs in London, Manolo Serapio Jr in Singapore, Adam Rose in Beijing and Rania El Gamal in Kuwait; Editing by Christopher Johnson, Chizu Nomiyama, Bernadette Baum and Marguerita Choy)