Fresh turmoil as oil tumbles below $30

OIL crashed below $30 a barrel last night for the first time in 12 years on another day of turmoil on financial markets.

Crude fell nearly 3pc in London to as low as $29.96 – a level not seen since April 2004 and well below the recent peak of $115 reached in early 2014.

The latest slump came amid speculation of an imminent nuclear deal between Iran and world powers that would see the end to sanctions on the country – paving the way for a surge in oil exports. That would flood an already over- supplied market.

Analysts at banking group Standard Chartered this week predicted that oil could hit $10 a barrel.

The latest fall in the oil price came as shares on Wall Street tanked.

The FTSE 100 rose 31.73 points to 5960.97 in London but the Dow Jones Industrial Average tumbled 364.81 points to 16,151.41 in new york.

‘We’re in a perfect storm,’ said yousef Abbasi, global market strategist at JonesTrading Institutional Services in new york.

‘Even though we knew a lot of these factors in the past, they all seemed to come together at the start of 2016 to take a bite out of people. There’s a combination of a buyer’s strike, some disinterest, some confusion, and to be completely honest, some exasperation. Guys are frustrated.’ Crude initially rose 3pc in early trading but was knocked back again. The shortlived rise helped commodity stocks to rebound yesterday. Oil giant BP, which announced 4,000 job cuts on Tuesday, closed up 12.75p, or 3.95pc, at 335.85p. Culling costs and paying off debt at Africa-focused FTSE 250 oil firm Tullow Oil resulted in shares soaring 13pc in morning trade. It ended the day up 5.8p, or 4.7pc, to 128.9p.

Tullow’s production update was in line with expectations. But investors were particularly cheered that total expenditure last year came in 10pc lower than expected at £1.2bn.