The euro has plunged to a nine-year low against the dollar on worries that a victory in Greece by the far-left Syriza party in the January 25 election will result in the country's departure from the European Union.
The EU currency's value, which dived on Monday to $1.1864, a level last reached back in 2006. was also dented by growing expectations of quantitative easing, or economic stimulus, from the European Central Bank.
"Greek problems may spell trouble for the eurozone (and) may impact energy demand out of Western Europe -- especially with press suggesting German politicians are talking about Grexit," said analyst Anthony Cheung.
"The dollar keeps strengthening and weighing on oil prices, with the Federal Reserve still on track to lift rates, while non-farm data on Friday should be another decent jobs statistic," added Cheung.
A long rally in the greenback, which gained 11 percent last year against a basket of major rival currencies, has weighed on the dollar-priced oil market by making crude more expensive for buyers using weaker currencies.
Oil has dropped about 50 percent since June on worries about weak demand and a decision by the Organisation of the Petroleum Exporting countries not to cut output in response to lower prices.
"People are thinking about promises from OPEC, mostly Saudi Arabia, that they'll continue to produce at very high levels," added Bart Melek, head of commodity strategy at TD Securities.
"On the demand side of the equation, what we're getting is basically a lack of demand growth... as Europe is potentially in crisis."
Global oil prices collapse
Global oil prices on Monday collapsed under $50 for the first time in more than five years on the strong dollar, plunging equities, demand worries and plentiful crude supplies.
The renewed slump came as the Dow index stood down more than 200 points and European equity markets lost more than two percent on fears of a Greek exit, or so-called Grexit, from the eurozone.
At about 1630 GMT, US benchmark West Texas Intermediate for February delivery tumbled to $49.95 per barrel, touching the lowest level since May 1, 2009.
London's Brent North Sea crude for February dropped to a similar nadir at $52.66 a barrel.
New York crude later stood at $50.27, down $2.42 from Friday's closing level. Brent was at $53.09 a barrel, down a hefty $3.33.
Traders eye US data
Traders meanwhile awaited fresh leads from top crude consumer the United States.
Singapore's United Overseas Bank said in a commentary that the key US employment report on Friday and the release of the latest meeting minutes from the US Federal Reserve on Wednesday "will dominate the market's attention" this week.
Investors will pore over both releases for fresh clues on when the US central bank will raise interest rates, the Singapore lender said.
Daniel Ang, investment analyst at Phillip Futures in Singapore, said crude prices are expected "to continue to be on (a) bearish trend".
"After what seemed to be profit-taking at the end of the year, oil bears have returned from their holidays and are back for more," he said.
"As we continue to take a bullish stand for the US economy, we expect the dollar to strengthen, thus putting further downward pressure on oil prices."