Crude oil slips below $45 a barrel in China-led turmoil
Crude in London slid below $45 a barrel for the first time since March 2009 on concerns Chinese demand is slowing just as Iran and the US threaten to expand a global glut.
Brent oil fell as much as 6.5pc, extending a 7.3pc drop last week that was the biggest in five months.
Commodities sank to the lowest in 16 years as forecasts for the weakest Chinese growth since 1990 spurred investors to seek out the safest assets. US energy companies declined as much as 6pc on the Standard & Poors 500 index. Losses eased after equities cut yesterday's initial declines by half.
Iran's Oil Minister Bijan Namdar Zanganeh vowed to expand output "at any cost", according to the ministry's news website.
The number of active oil rigs in the US rose for the seventh time in eight weeks, data showed on Friday.
Oil's worsening global surplus has driven prices down by more than 30pc since May. Iran aims to join leading members of the Organisation of Petroleum Exporting Countries (OPEC) in raising production while US crude stockpiles are almost 100m barrels above the five-year seasonal average.
"We're trading at six-and-a-half year lows and have further to go," Bob Yawger, director of the futures division at Mizuho Securities USA in New York, said. "The risk-off scenario continues to play out. The statements from the Iranian oil minister about fighting for market share didn't help."
Brent for October settlement declined $2.01, or 4.4pc, to $43.45 a barrel on the London-based ICE Futures Europe exchange at 11:10am New York time. Futures touched $42.51, the lowest since March 12, 2009.
Brent oil traded at a $4.36 premium to West Texas Intermediate, the US benchmark.
The Bloomberg Commodity Index of 22 raw materials fell as much as 3pc to the lowest level since August 1999 as China's economic slowdown exacerbated surpluses from oil to metals.
The index is a measure of returns that takes into account the loss or gain from holding futures contracts as well as the performance of the underlying commodities.
Crude's slump triggered losses in related equities. Oil and natural gas producers plunged to the lowest in almost four years amid the wave of selling.
An index of 40 energy explorers dropped as much as 6pc yesterday, for the steepest intraday decline since November.
Cabot Oil & Gas was the worst performing oil explorer in the S&P 500 energy index, tumbling as much as 7.7pc to $22.52 in intraday trading.
Exxon Mobil, the largest US energy producer, fell as much as 7.7pc to $66.55 a share, the lowest since October 2010.
Iran was OPEC's second-largest producer before sanctions over its nuclear programme were tightened in mid-2012. The nation will seek to regain oil sales regardless of prices, Namdar Zanganeh said last month after negotiators reached a deal with world powers easing economic curbs.
OPEC has pumped above its quota of 30m barrels a day for more than a year. September petrol futures tumbled 6.67 cents, or 4.3pc. (Bloomberg)