European markets finished in negative territory on Monday as a renewed slip in oil prices weighed on investor sentiment.

Oil hits commodity stocks

U.S. crude and Brent crude were both trading higher in Europe's morning trade, following the sharp surge seen in prices at the end of last week, however, prices came under sharp pressure in late morning trade on fears of a swelling oversupply. Iraq's oil ministry said its oil output had reached a record high in December on Monday, according to Reuters, with fields in the central and southern region of Iraq producing as much as 4.13 million barrels a day. This announcement of a growing supply amid weak demand caused prices to slip sharply. Brent crude, is last stood more than 4 percent off, around $30.87, while U.S. crude was down some $1.50, hovering around $30.66. The fall in the oil price hit commodities, with some oil and gas stocks falling sharply. Seadrill finished at the bottom of the benchmarks, down almost 9 percent, with Subsea 7 and Tullow Oil down more than 5 percent each. Statoil finished 3 percent down after HSBC cut its price target on the stock. Shares in several of the miners also closed lower, including Rio Tinto, off 2.7 percent, however the sector had a handful of good performers including Glencore, which finished almost 3 percent higher.

Siemens M&A chatter

In business news, Siemens is poised to buy CD-adapco, a privately held U.S. engineering software firm, for close to $1 billion in cash, according to Reuters, citing people familiar with the matter. Shares however closed slightly higher. Britain's BT has been urged by lawmakers in a report to spin off its national broadband network to boost speeds, sending shares to close over 3 percent lower. Kingfisher, which owns home improvement retailers including B&Q in the U.K., announced a strategy update in which it said it is targeting a £500 million ($715 million) increase in sustainable annual profit in five years time. But shares were over 6 percent lower on the news.

European banks in focus