Decline in commodity prices sees low inflation put squeeze on ECB

A persistent supply glut has seen oil prices fall sharply in November, with prices in the US threatening to drop below $40 a barrel at one stage.

Oil prices could well fall further in the coming months, with Iranian exports set to hit the world market following the ending of sanctions.

A mild winter this year would add to the downward pressure on prices given the extent of over-supply. Some commentators see oil falling to $20 a barrel unless Opec moves to rein in production. Up to now, oil producers have been reluctant to cut back on output despite the persistent oversupply and glut on the world market.