Oil prices face "weeks" of falls, analysts fear, after the United Kingdom's vote to leave the European Union spurred a sell-off across markets on Friday.
Prices fell more than 6 per cent after 52 per cent of UK voters said they wanted out of the EU.
Global benchmark Brent was trading down 4.50 per cent at $48.62 (D78.43) as of 1:45pm UAE time on Friday. It earlier fell by more than 6 per cent. US crude was trading down 4.21 per cent at $48 a barrel.
Losses will continue into next week, analysts say, as a cloud of uncertainty hangs over the future of the UK and the impact of the vote's result on the global economy.
"We can expect the stronger dollar and possible economic damage to the UK and EU to depress oil prices," Robin Mills, chief executive of the Dubai-based Qamar Energy, told Gulf News in an email.
The rally seen in oil prices this year, which at one point touched around $50 a barrel, is believed to be all but over.
"This could last for weeks," Gary Dugan, the chief investment officer of Dubai's biggest lender Emirates NBD, told Gulf News.
There will be "significant risk aversion in asset markets," he said.
The pound plunged to a 31-year low over uncertainty over the future of the UK outside of the EU. Scotland has said it sees its future in Europe and wants another referendum on independence and politicians in Northern Ireland have called for reunification with Republic of Ireland. Both Scotland and Northern Ireland overwhelmingly voted to "remain" in the EU.
Contagion of the vote is the biggest threat to oil prices, Shwan Zulal, director of London-based Carduchi Consulting, told Gulf News by phone.
The euro also depreciated on Friday as politicians in the France, the Netherlands, Italy and Denmark called for their own vote on EU membership.
"Oil prices are not going to be helped by this and we're going to see a softening of the price further," said Zulal, who is also an associate fellow at King's College London.
The dollar rose sharply as the pound and euro fell, which is likely to suppress prices. Oil is priced in dollars and so a strong dollar makes it more expensive for foreign currency holders.
National Bank of Abu Dhabi senior economist Alp Eke told Gulf News prices could fall "below $40" in the next two weeks due to market uncertainty.
Analyst will be closely watching how Wall Street reacts when it opens later on Friday to what was seen as one of the most important referendums in history of Europe.