Bloomberg reports that the price of Brent crude oil fell below $53 a barrel for the first time since May 2009 sparking a wider selloff in equity markets as oil majors and explorers suffered.
Record oil production from Russia and Iraq pushed Brent Crude down to $52.9 a barrel and fuelled fears that the price of the commodity will keep falling despite having already more than halved from $115 per barrel in June last year.
Iraq, the second-largest producer in the Organization of Petroleum Exporting Countries (Opec), plans to increase crude exports to a record in January, the Oil Ministry said. Russia’s output rose to a post-Soviet high in December, according to preliminary Energy Ministry data.
The tumbling oil price sparked a wider selloff in the commodity heavy FTSE 100 as it slumped by 130.64 points, or 2pc, to 6,417.16 in afternoon trading. The UK’s leading index of shares is made up of about 23pc oil producers and mining companies.
Recall that several weeks ago, the Gulf countries said they would not cut production even if the price of oil fell to $20 a barrel.