Oil prices finished at their lowest levels since February 2009 on Monday as markets continue to reel from OPEC's refusal last week to cut back production.

The January contract for West Texas Intermediate crude, the US benchmark, sank $2.32 to $37.65 a barrel on the New York Mercantile Exchange, a drop of 5.8 percent.

In London, Brent North Sea for January delivery ended at $40.73 a barrel, down $2.27 from Friday's close.

The Organization of the Petroleum Exporting Countries -- which pumps about 40 percent of the world's crude oil -- decided on Friday against cutting output to raise prices.

The 13-member OPEC cartel took no action to shore up the market and observers said it appeared to be in disarray.

"The decision by OPEC members to keep oil production output at record high levels has seen oil prices plummet again," said Sanjiv Shah, chief investment officer of Sun Global Investments.

He added that the decision "suggested that the organization was effectively abandoning its long-term strategy of limiting production and acting as a cartel, leading to more downward pressures on oil prices in the short term".

OPEC countries are currently producing an estimated 32 million barrels per day, above the group's prior 30 million barrel target. The cartel did not set a new production ceiling on Friday and said in a communique that members "should continue to closely monitor developments in the coming months."

With OPEC member Iran expected to resume substantial exports next year, hopes were high that the cartel would lower supplies.

But it has now put off a production reassessment to its next meeting on June 2, 2016.

"Crude oil prices were no doubt compressed by the lack of an agreement at the OPEC, signaling that the supply glut will persist longer," said analyst Bernard Aw at IG Markets in Singapore.

Traders meanwhile were switching focus to the US Federal Reserve's interest rate decision on December 16.

"While all eyes are now on the Federal Reserve as it meets next week for the last policy meeting this year to decide whether to raise its benchmark rate, economic data from China will set the tone of prices in the coming weeks," EY analyst Sanjeev Gupta said.