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Glut jitters hit crude oil prices

The price of a barrel of Brent crude tumbled by 1.8% to US$44.86, back below the US$45 mark

Oil rig in the Gulf of Mexico
Analysts said sentiment was clearly turning bearish towards West Texas Intermediate

Persistent oversupply concerns knocked crude oil prices and industry shares on Monday.

The price of a barrel of Brent crude tumbled by 1.8% to US$44.86, back below the US$45 mark. US light crude fell 2% to US$43.31 a barrel.

Shares in majors took a hit, with BP plc (LON:BP.) down 12.35p, or 2.73%, to 439.75p, while Royal Dutch Shell Plc's (LON:RDSB) B stock dropped 59p, or 2.75%, to 2089p.

FXTM Research analyst Lukman Otunuga said: "Oil has been fundamentally bearish for an extended period and could be poised to decline lower when the awful mix of both supply and demand fears encourages bears to install a heavy round of selling.

"Sentiment is clearly turning bearish towards West Texas Intermediate and the appreciating dollar could ensure prices trade lower towards US$40.

"A decisive breakdown and daily close below US$44 could encourage sellers to drag prices lower towards US$40."

Mike van Dulken at Accendo Markets highlighted the Baker Hughes rig count, which posted a sharp increase of 14 operational rigs last week.

He said: "Markets remain concerned by a continued glut of gasoline and other refined products."

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