LONDON - Oil collapsed by almost 40% in 2015 to strike 11-year lows on chronic oversupply, demand fears and China's slowdown, in a global commodities rout that sent metals tumbling.

Europe's benchmark oil contract, Brent North Sea crude, nosedived on Dec. 22 to just $35.98 per barrel -- the lowest level since early July 2004.

And U.S. benchmark West Texas Intermediate (WTI) oil tanked on Dec. 21 to $33.98 a barrel -- which was a point last seen in mid-February 2009.

OPEC has continued to pursue its strategy to maintain its collective oil output despite abundant supplies of crude that have ravaged revenues.

Crude futures have dived from more than $100 a barrel in July 2014 on the strong dollar and the stubborn worldwide oil supply glut.

However, in both June and December, the Organization of the Petroleum Exporting Countries -- which pumps 40% of the world's oil -- refused to slash output. 

The Saudi-backed policy is aimed at pushing oil prices lower in order to squeeze less-competitive players, including U.S. shale producers, out of the market.

The cartel -- whose biggest player is Saudi Arabia -- is currently producing an estimated 32 million barrels per day, above the group's 30-million-barrel target. 

Added to the picture, the United States -- the world's biggest consumer of crude -- revealed Wednesday that oil inventories swelled by 2.6 million barrels to 487.4 million barrels last week.

To make matters worse, Iran is ready to pump at least 500 million barrels per day more as soon as Western sanctions on its oil are lifted, possibly in early 2016."

— Gain Capital analyst Fawad Razaqzada

That confounded expectations for a 2.5-million-barrel drop, and came alongside news of rising U.S. production.

Traders also weighed Saudi Arabia's 2016 austerity budget, which suggested that the key crude exporter was planning for oil prices to stay low for the foreseeable future.

The market is also fearful of surging oil supplies from Iran next year, once sanctions are lifted.

"With U.S. production growing for the last few weeks and global inventories being near storage limits, this is yet another reminder that the supply glut could take a long time to clear, which may mean even lower oil prices in the near term," warned Gain Capital analyst Fawad Razaqzada.

"In fact, Saudi Arabia is already planning for lower oil prices next year. To make matters worse, Iran is ready to pump at least 500 million barrels per day more as soon as Western sanctions on its oil are lifted, possibly in early 2016."

Base Metals Stumble

Base or industrial metals suffered a tumultuous 2015 on the back of Chinese demand fears, a U.S. interest rate hike and the strong greenback -- which makes dollar-priced commodities more expensive for buyers using weaker currencies. That tends to dent prices.

Aluminum, copper and nickel languished at their lowest levels since the notorious 2008/2009 global financial crisis, while zinc plumbed a June 2003 nadir on abundant supplies.

Over the course of 2015, zinc shed more than 40%, while copper, tin and nickel slumped by about one quarter. 

Aluminum meanwhile fell 16% and lead lost just 5%.

Fears intensified in 2015 of a so-called "hard landing" for the slowing Chinese economy, which is a key consumer of most commodities.

"We believe that the metal markets have now priced in any hard landing for China, by far the largest consumer of metals," said Commerzbank analyst Eugen Weinberg.

"We do not think this will happen, however -- instead, the Chinese economy is likely to continue to cool in a controlled manner [with] the Chinese government and central bank no doubt doing all they can to ensure that this is the case."

Weinberg added that the sell-off in industrial metals was not linked to the fundamentals of supply and demand.

"We believe that next year should see a noticeable recovery movement, for the price slide has been exaggerated... Production cuts will significantly tighten supply."

By Roland Jackson

Copyright Agence France-Presse, 2015