LONDON: World oil prices tumbled Tuesday to strike the lowest levels in more than a year, hit by a markets rout that was rooted in fears over the world economy.
Oil tanked, dented by concerns over the demand outlook and a stubborn supply glut, while the dollar slid versus main rivals.
Brent and New York crude contracts collapsed as low as $57.20 and $47.84 per barrel respectively during the morning session.
“Stocks have not been the only victims of broader market misery this festive season," said Oanda analyst Craig Erlam.
“Oil tumbled … as equities plunged into the red as investors continue to view 2019 as a challenging year for global growth."
– Challenging year –
There are also questions about the impact of a recently promised output cut by OPEC and other top producers including Russia.
“OPEC may have come to an agreement with its allies to cut production next year and rebalance markets … but traders are clearly not convinced enough will be done," noted Erlam.
Crude prices have fallen about a third from four-year highs touched at the start of October.
“The crash seen in the price of crude oil over the past few months has arguably been the biggest story of the year," noted XTB analyst David Cheetham.
“Fears that Iranian sanctions reimposed by Washington would cause a drastic fall in output saw the market rally to its highest level in almost four years at the start of Q4, but these concerns now look badly misplaced."
– Wall Street selloff –
Wall Street charged lower on Monday after data showed weakness in the Chinese and eurozone economies, despite further indications Beijing and Washington might be moving to end their trade war.
All three main indices in New York dived following the release of well-below-par economic figures.
Asia followed suit on Tuesday with sharp losses, as investors also awaited the US Federal Reserve's interest rate decision due later this week.
Europe also struggled, with London stocks down 0.5 percent and Paris down 0.1 percent — but Frankfurt rose 0.4 percent in volatile trade despite news of falling German business confidence.
“There is a lot of pessimism in the markets right now," added Erlam.
Dealers across the world have taken fright over a range of issues, including the China-US trade war, falling oil prices, political uncertainty, China's stuttering economy and geopolitical tensions.
Also weighing on confidence has been the Fed's monetary tightening drive that has seen it lift interest rates through the year, making it more expensive for traders to borrow cash for investment.
The central bank concludes its latest policy meeting Wednesday and is widely expected to announce another hike.
However, US President Donald Trump on Tuesday once again hit out at the bank's policy and called on it not to lift rates again.