Image copyright Getty Images

Oil prices have dropped to their lowest level in over eight months amid fears about a slowdown in demand.

International benchmark Brent crude dropped almost 7% to $65.11 (£50.24) a barrel, its lowest level since March.

US oil - known as West Texas Intermediate - fell over 7% to $55.69, its lowest level since November last year and the twelfth day it has fallen.

The latest falls came after oil cartel Opec reduced its forecast for global oil demand next year.

Opec now expects world demand to grow 1.29m barrels a day next year, about 70,000 barrels a day lower than last month's forecast.

Saudi Energy Minister Khalid al-Falih had already said on Monday that Opec had agreed there was a need to cut oil production next year to prevent oversupply.

Saudi Arabia is the largest member of the Opec cartel of Middle East and African oil producers.

Oil price tumbles

Capital Economics said it was clear that "fears over excess supply in the oil market are starting to build".

It said that it expected "subdued global economic growth" to drive demand even lower than Opec was currently forecasting.

Brent Crude has now fallen over 25% since hitting a four-year high in early October, while US oil has lost 28% since its October peak.

"It's like a run on the bank. It's getting to the point where it doesn't seem to be about fundamentals anymore, but a total collapse in price," said Phil Flynn, analyst at Price Futures Group.

The latest drop in price comes after US President Donald Trump tweeted on Monday that he hoped there would be no oil output reductions, after Saudi Arabia said on Sunday that Opec was considering cutting supply next year.