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Oil heads for $36 a barrel amid world glut fears

Oil prices steadied yesterday but only after plumbing lows last seen during the 2009 financial crisis as an intensifying supply glut sparked fears the world will run out of storage for crude.

Brent and US crude futures sunk beneath $40 a barrel, hitting February 2009 levels and extending Monday's 6pc rout, before paring losses on what traders said was most likely short-covering.

Brent crude dropped 25 cents to $40.48 a barrel, after setting a session low at $39.81.

US crude's West Texas Intermediate (WTI) futures slid to $36.64 a barrel at one stage.

Oil's sharpest sell-off since the summer came after Friday's meeting of the Organization of the Petroleum Exporting Countries (OPEC) which all but abandoned price support for crude through production cutting the group once resorted to.

OPEC also failed for the first time in decades to agree to a production ceiling. (Reuters)

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