Markets tumbled on opening this morning as traders reacted to sliding oil prices, and as Royal Dutch Shell said its earnings are expected to more than halve for 2015.
The FTSE 100 Index fell 3%, or 175.2 points, to 5699.5 after the price of Brent Crude fell below $27.50 before staging a slight recovery.
Crude oil prices have been falling since 2014, but large Middle Eastern producers have kept up output in a bid to retain market share and put US shale rivals under pressure.
The early falls in London more than wiped gains of just under 100 points yesterday.
Germany’s DAX and the Cac 40 in France were also 3% lower.
Oil giant Shell fell more than 4% or 60p to 1310p after it said it expects full-year underlying earnings to tumble to between $10.4billion dollars (£7.3 billion) and $10.7billion (£7.6
billion), due to falling oil prices.
The group is weeks away from completing a 55 billion US dollar (£38 billion) deal to buy gas giant BG Group.
BP also fell more than 2% or 8p to 334.3p.
Elsewhere, pub group JD Wetherspoon fell more than 6% or 44.5p to 630p after it warned on profits.
It said it expected its operating margin for the half year to January 24 would be around 6.3% due to higher staff costs, or 1.1% lower than the same period last year.
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