The supply of oil has increased while the demand has stalled or decreased.

U.S. crude production has gone up from 5 million barrels per day (bpd) in 2008 to 7.2 million bpd in 2012. The U.S U.S. is the second-largest producer of total oil in the world. Much of this has come from the boom in shale and tight oil, starting around 2006 (pg 4), which has gone from almost nothing to 2.4 million bpd in 2013. The U.S. also eased its oil export restrictions in 2014 after mostly banning it since the Arab oil embargo.

If some of those numbers don't seem to add up: Total oil is crude oil plus liquid fuel generated from natural gas. The difference is quite substantial for the U.S. at 12 million bpd and 7.5 million bpd.

OPEC (a cartel of oil-producing countries, mostly of them in the Middle East) tends to control its production in response to oil prices, to keep revenues constant. Saudi Arabia accounts for a quarter of OPEC's production and therefore tends to lead OPEC policy. Normally, a situation like the current one would have caused OPEC to reduce its production to maintain the price, but this time around OPEC has started a price war with U.S. oil producers in the hope of driving them out of the business permanently. Saudi Arabia is basically playing the game of [who can outlast the other]. (http://www.forbes.com/sites/nathanvardi/2015/01/05/saudi-arabias-750-billion-bet-drives-brent-oil-below-54/)

It also doesn't help that parts of the world economy, including Europe and China, aren't growing as fast as anyone would like and thus the demand for oil is low as well at the moment.