(MENAFN- AFP) Crude oil prices slid to seven-year low points this week as oversupply concerns, low demand growth and a strong dollar causes turbulence across the global commodity sector.
"Commodity prices have plunged to new multi-year lows again, with crude oil and iron ore leading the way, and the latter at decade-lows," wrote analysts at Italian bank UniCredit in a note to clients.
"Another rout in resource equities has only added to the feeling of doom and gloom that this sector cannot shake."
Share prices in energy and mining companies tumbled also this week in the wake of sliding prices for key raw materials.
Shares in global mining giant Anglo American tumbled after it announced "radical" restructuring of the firm that will slash its workforce by almost two-thirds.
And in a blow to shareholders, Anglo said it would suspend dividend payments until the end of next year.
Also this week, Rio Tinto said it planned to slash spending to maintain profits in the face of the commodities price rout.
Tumbling values for commodities, including Rio's main raw material iron ore, has massively increased the pressure on mining firms.
"With key benchmark commodity indexes below levels last seen in the 1990s, and Chinese demand set to remain weak, it is clear that commodity prices remain some way short of giving any evidence of bottoming out," said Michael Hewson, chief market analyst at traders CMC Markets UK.
Despite the gloom for mining companies, metals prices steadied this week after recent large falls.
Markets were meanwhile looking ahead to next week's all-important meeting of the Federal Reserve, when the US central bank is widely expected to raise interest rates.
The prospect of higher rates has boosted the dollar, which in turn makes crude priced in the US unit more expensive for buyers holding weaker currencies. This also tends to weigh on oil demand.
Crude prices, whose recent heavy losses have been accelerated since OPEC last week decided against cutting its record-high output, took another tumble Friday after the International Energy Agency (IEA) said oversupply would persist until late 2016.
In response, Brent crude futures for January delivery collapsed to $38.04 a barrel -- a level last seen at the end of 2008 amid the global financial crisis.
US benchmark West Texas Intermediate (WTI) for delivery in January dived to $35.80 -- last witnessed in February 2009.
"Comments from the IEA have... seen both WTI and Brent fall aggressively, after they indicated that the unrelenting supply would see oil prices lower into the new year," said analyst James Hughes at trading firm GKFX.
Meanwhile the IEA said that the decision by the OPEC oil cartel to continue its policy of targeting market share rather than price "does not –- for now -- alter the status quo on its supply".
"There is evidence the Saudi-led strategy is beginning to work," said the IEA, adding that it expects non-OPEC supplies to drop by 600,000 barrels per day next year owing to a drop in oil production from North American shale rock.
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