Oil prices fell by more than a dollar on Monday to near their lowest levels since 2009 after Morgan Stanley cut its price forecast for Brent, saying oversupply will likely peak next year with OPEC deciding not to cut output.

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

Under the pump: Oil prices have lost more than 40 per cent since June.

Brent crude for January delivery dropped to a low of $US67.73 a barrel, near last week's trough of $US67.53 which was its weakest since October 2009.

Morgan Stanley slashed its 2015 base case forecast for Brent to $US70 from $US98 a barrel and for 2016 to $US88 from $US102 a barrel. In its bear-case scenario, the bank sees the crude benchmark falling to a low of $US43 a barrel in the second quarter of next year.