REUTERS
Oil prices tumbled 4% on Monday, coming close to their 11-year low, on growing fears that the global oil glut would worsen in the months to come in a pricing war between leading OPEC and non-OPEC producers, Reuters reports.
Brent crude fell by 4% to below $36.40 a barrel for the first time since December 2008 and U.S. West Texas Intermediate (WTI) sank almost 3% below $34.60 a barrel, according to Reuters.
Brent traded only 14 cents above the lows last seen during the 2008 financial crisis of $36.20 a barrel.
If Brent falls below that level, that will be its lowest since mid-2004 - a year when oil was beginning its surge from the single digits it hit during the 1998 financial crisis and when talk of a commodity super-cycle was only beginning.
WTI's financial crisis low was $32.40 in December 2008.
Read alsoOil gets cheaper as OPEC opts to maintain oil production "Oil is coming under pressure as the lack of OPEC cuts mean incessant oversupply continues," said Amrita Sen from Energy Aspects think tank.
New supply is likely to hit the market early next year as OPEC member Iran ramps up production once sanctions are lifted as expected following the July agreement on its disputed nuclear program.
Gulf producers and Russia have said they would not cut output even if prices fell to $20 per barrel.
OPEC supply is likely to increase by 1 million bpd next year, Morgan Stanley analysts said in a research note on Monday.
"Almost the entirety of added supplies in 2016 will come from Iran, Iraq and Saudi," it said.