Oil prices continue to fall. The benchmark Brent crude was at one stage under $79 a barrel on Thursday, a four-year low.
Factors included a further slowdown in economic activity in China, which is the world’s biggest energy consumer.
Shares of major oil companies took a hit, as did the currencies of major producer countries Russia and Nigeria.
“$80 is the pain threshold,” said Alexandre Baradez, chief market analyst at IG France.
“Below that, a lot of the oil majors’ projects are not profitable and a lot of oil-producing countries start to have serious budget issues. It’s also a problem for the eurozone because it drags down inflation.”
A glut of oil on the world market has seen Brent slide 30 percent over the last five months.
West Texas Intermediate, the US benchmark, has taken a similar tumble. Traditionally cheaper that Brent, it was close to $76 a barrel on Thursday.
Increasing shale production in North American has boosted supply .. at the same time that demand has slowed.
Ministers from the OPEC cartel meet in two week’s time to decide if they will cut output, which would boost prices.
But OPEC’s most powerful member, Saudi Arabia, does not back that idea, seemingly caring more about keeping market share than supporting prices.
On Wednesday, Saudi Oil Minister Ali al-Naimi said the kingdom wanted stable oil prices but did not want to “politicise oil”, which was “purely business”.
“We do not set the oil price. The market sets the prices,” he added.
Some analysts think the Saudis are willing to let Brent fall as low as $75 a barrel, a level previously identified by the kingdom as a “fair price”.
Demand for OPEC oil will drop to 29.20 million barrels per day (bpd) next year, almost one million bpd less than it currently produces, the cartel said this week.