Oil fell 4.5 percent to around $44 a barrel on Monday after OPEC decided to leave existing output targets unchanged.
OPEC agreed on Sunday to enforce existing output curbs more strictly, rather than introduce new ones, to help heal the economy even though crude oil inventories have remained relatively high and fuel demand has been slow.
U.S. light crude for April delivery fell $2.09 to $44.16 a barrel by 0951 GMT. London Brent crude fell $2.01 to $42.92.
"It's a very reasonable decision for OPEC to take at this point, but that means they shouldn't expect to see oil prices at $50 for the foreseeable future," said Jonathan Kornafel, Asia Director of U.S.-based Hudson Capital Energy in Singapore.
U.S. Energy Secretary Steven Chu said he was pleased with the outcome.
The Organization of the Petroleum Exporting Countries (OPEC) will next meet in May.
Some analysts said OPEC's adherence to the existing cuts might be enough to offset falling demand and reverse the recent increases in oil inventories in many countries, including the world's largest oil consumer, the United States.
OPEC's compliance has been estimated at about 80 percent. Full compliance would take away more than 800,000 barrels per day from the market..
"The oil market may react negatively to the lack of a new cut from OPEC at its recent meeting. However, we believe the cuts made to date, coupled with falling non-OPEC output, could already be enough to offset weaker demand and result in observable inventory declines in the coming months," Collins Stewart said in a research note.
Ali al-Naimi, the oil minister of the world's top oil producer and OPEC's most influential member, Saudi Arabia, said on Monday he was very happy with OPEC's decision.
The producer group's Angolan president said in an interview on Sunday that the supply curbs had brought some stability to oil markets, although prices remained too low to encourage investment in new supplies..
The market will turn to the economic data and the stock market as a gauge of economic activity.
Some support might come from the world stocks market, which rose on Monday for their fifth session in a row, lifted by hopes that the U.S. economic downturn may be bottoming out and with investors seeking to take advantage of cheaper equities.
