New York oil prices sank to a six-year low, falling below $44 per barrel as the market was plagued by plentiful supplies and the strong dollar.
US benchmark West Texas Intermediate (WTI) dived as low as $43.35 before recovering to $43.96.
European benchmark Brent North Sea crude fell to $54.29 a barrel in London trade.
OPEC said in its monthly report that a recovery in oil prices which began last month was not justified by fundamentals as there remained a supply glut in the market.
Crude prices rallied about 20% in February, ending a losing streak lasting about eight months during which prices collapsed by 60%.
But the OPEC cartel warned that prices picked up even though there was still an oversupply of almost one million barrels a day on the market.
"ICE Brent and Nymex WTI crude oil futures defied fundamentals and moved up sharply, posting their first gains since June 2014 after seven months of a declining streak that ended with values down by almost 60%," said the cartel in its report.
OPEC's assessment of the global oil market came after the International Energy Agency issued a similar reading on Friday.
The IEA's warning that the rebound in oil prices is built on flimsy foundations sent crude prices sliding.
