The price of oil tumbled to a four-year low after the west’s energy watchdog cut its forecast for oil-demand growth and said that it did not expect Opec to cut supply when it meets next month.

A glut of crude in the market, partly driven by the US shale boom, combined with weakening oil demand as the global economic outlook darkens has pushed the price of oil to its lowest level since 2010. Brent, the international oil benchmark, which has plunged almost 25 per cent since mid-June, fell $1.65 to $86.58 in afternoon trading .

Crude’s drop has reverberated across the oil industry, hitting the shares of shale oil explorers in the US and causing jitters in oil-producing countries, such as Russia, that rely heavily on oil revenues to fill government coffers.