The International Energy Agency said widespread over-supply has led to prices dropping below $60 a barrel and this trend is set to continue.
The agency said lower oil prices are likely to last well into next year because of the massive over supply.
It said the world oil market is battling to absorb the huge volumes of oil now being produced.
This will be welcome relief for South Africans who have seen a number of significant fuel price increases since January this year.
Core members of the Organisation of Petroleum Exporting Countries have continued to produce the same level of oil over the past year despite falling oil prices in an attempt to regain market share.
