Oil prices slid under $40 a barrel this evening on concerns that a deepening global economic downturn could spark a slump in demand for energy.
The market was also affected by news of a possible resolution to the Russia-Ukraine gas supply crisis, traders said.
US crude slumped $2.95 to $37.88 a barrel, while Brent North Sea crude shed $1.97 to $42.45.
The market had tumbled last week after a brief bounce above $50 on the back of jitters over the Russia-Ukraine crisis and ongoing unrest in Gaza.
But today the EU secured Russian assurances that gas shipments to Europe would resume shortly after Moscow and Kiev re-signed a deal to monitor the flow to EU markets.
Oil prices dived by 16% last week on concerns that a US stockpile build-up reflected how the global economic slump is further dampening demand.
