Benchmark crude Brent fell below $80 a barrel for the first time in four years following further signs that China’s economy may be slowing.
Brent has fallen more than 30 percent since June, and comments from certain OPEC members have not helped the situation when they said demand for its members' oil could drop by about a million barrels per day in 2015 due to the U.S. shale boom.
Overnight, data from Beijing showed factory output and investment growth was close to a 13-year low, and below-forecast, reinforcing signs that the world's biggesteconomywould see its weakest growth for almost 24 years this year.
Falling energy costs, while a positive for consumers, have raised concerns about profitability of major oil companies and their capitalspending, analysts said.
Many view $80 Brent as the absolute minimum that producers will be able to tolerate. Any prices below this and questions start to get asked about the viability of new drilling projects as well as the on-going profitability of oil companies.
Brent is currently trading at $79.00 a barrel down $1.38 or 1.76 percent.
All eyes will now be on the next OPEC meeting, which is scheduled to be held in Vienna on November 27. It has already been reported that Saudi Arabai has already cut supply to try and address the current glut. However, all OPEC members agree that more will need to be done in order to make sure oil prices don’t go in to a further dive.