Oil, languishing in market turbulence, slips to 7-year low

London - Share prices in energy and mining companies tumbled also this week in the wake of sliding prices for key raw materials.

Crude oil prices slid to seven-year low points last week as oversupply concerns, low demand growth and a strong dollar causes turbulence across the global commodity sector.
"Commodity prices have plunged to new multi-year lows again, with crude oil and iron ore leading the way, and the latter at decade-lows," wrote analysts at Italian bank UniCredit in a note to clients. "Another rout in resource equities has only added to the feeling of doom and gloom that this sector cannot shake."
Share prices in energy and mining companies tumbled also this week in the wake of sliding prices for key raw materials.
Shares in global mining giant Anglo American tumbled after it announced "radical" restructuring of the firm that will slash its workforce by almost two-thirds.
And in a blow to shareholders, Anglo said it would suspend dividend payments until the end of next year.
Also last week, Rio Tinto said it planned to slash spending to maintain profits in the face of the commodities price rout.
Tumbling values for commodities, including Rio Tinto's main raw material iron ore, has massively increased the pressure on mining firms.
"With key benchmark commodity indexes below levels last seen in the 1990s, and Chinese demand set to remain weak, it is clear that commodity prices remain some way short of giving any evidence of bottoming out," said Michael Hewson, chief market analyst at traders CMC Markets UK.
Despite the gloom for mining companies, metals prices steadied last week after recent large falls.
Crude prices, whose recent heavy losses have been accelerated since the Opec a week ago decided against cutting its record-high output, took another tumble on Friday after the International Energy Agency said oversupply would persist until late 2016. In response, Brent crude futures for January delivery collapsed to $38.04 a barrel - a level last seen at the end of 2008 amid the global financial crisis.
US benchmark West Texas Intermediate for delivery in January dived to $35.80 - last witnessed in February 2009.
"Comments from the IEA have... seen both WTI and Brent fall aggressively, after they indicated that the unrelenting supply would see oil prices lower into the new year," said analyst James Hughes at trading firm GKFX.
Meanwhile the IEA said that the decision by the Opec to continue its policy of targeting market share rather than price "does not - for now - alter the status quo on its supply".