Brent crude and West Texas Intermediate slumped to five-year lows amid concern that hedge funds and other money managers bet too much on rising prices.

Futures dropped as much as 3.7 percent in London and 3.4 percent in New York. Net-long positions on Brent rose to the highest in four months in the week to Dec. 2, according to data from the ICE Futures Europe exchange, while bullish bets on WTI climbed the most in 20 months. Brent declined 9.9 percent in the period and WTI slumped 9.7 percent.

"People might consider it a buying opportunity but we still have an over-supplied market," said Tom Finlon, Jupiter, Florida-based director of Energy Analytics Group LLC. "New lows will be tested. We are in for a volatile market. You have to expect very sharp swings."

Both Brent and WTI tumbled 18 percent in November as the Organization of Petroleum Exporting Countries decided to maintain its 30 million-barrel-a-day output target. Crude has traded in a bear market since October amid the fastest pace of U.S. production in three decades, rising output from OPEC and signs of weakening global demand. Banks including Morgan Stanley, BNP Paribas SA and Barclays Plc have cut price forecasts.

Brent for January settlement declined $2.42, or 3.5 percent, to $66.65 a barrel at 10:50 a.m. New York time on the London-based ICE Futures Europe exchange after reaching $66.53, the lowest intraday level since October 2009. The volume of all futures was 18 percent below the 100-day average.

WTI for January delivery dropped $2.11, or 3.2 percent, to $63.73 a barrel on the New York Mercantile Exchange, after reaching $63.63, the lowest since July 2009. Volume was 8.3 percent below the 100-day average.