LONDON, United Kingdom (AFP) — Global oil prices tanked Friday to fresh five-year lows, sending European stocks sliding, after a gloomy crude demand downgrade from the International Energy Agency and more weak Chinese economic data.

US benchmark West Texas Intermediate (WTI) for January delivery plunged to $58.80 per barrel — the lowest level since May 20, 2009 — having already closed under the psychological level of $60 on Thursday.

Brent crude for January meanwhile dived to $62.75 in morning London deals, striking a low point last witnessed on July 16, 2009.

The oil market — which has shed almost 50 per cent since June — plumbed the latest lows after the Paris-based IEA slashed its 2015 demand outlook, despite plunging prices.

Demand is set to grow by 0.9 million barrels a day to reach 93.3 million barrels, some 230,000 barrels less than the previous forecast, the IEA energy watchdog said in a report.

“Oil prices continue to dominate the markets as the IEA lowered oil demand expectations for the fourth time in five months,” said IG analyst Alastair McCaig.

This week’s dizzying drop in oil prices weighed heavily on Europe’s energy sector on Friday.

In late morning deals in London, the benchmark FTSE 100 index fell 1.42 per cent to 6,370.01 points compared with Thursday’s close.

The CAC 40 in Paris shed 1.34 per cent to 4,169.52 points and Frankfurt’s DAX 30 lost 1.14 per cent to 9,750.78.

“The FTSE, having a far greater weighting to the energy and commodity sector, has suffered more than most,” added McCaig.

In foreign exchange, the ruble sank Friday to record lows on the back of sliding oil, despite Russia’s central bank hiking its interest rate the day before in an attempt to halt the currency’s plunge and the resulting price rises.

The ruble fell to record levels of 71 against the euro and 57 against the dollar as the Moscow stock exchange opened, before rallying slightly.

The euro meanwhile drifted higher to $1.2433 from $1.2410 late in New York on Thursday.

“Out of the worldwide indices, the FTSE has been the biggest victim of the oil-price crash, as its energy sector capitulates under the pressure of Brent crude’s decline,” said Spreadex analyst Connor Campbell.

Shares in oil services company Petrofac topped the FTSE 100 losers, shedding 4.51 percent to 691.31 pence.

Energy explorer Tullow Energy dived 3.25 percent to 360.7 pence, while oil major BP slid 2.13 per cent to 390.3 pence.

Back in Paris, shares in French oil and gas giant Total dropped 1.59 per cent to 41.895 euros.

Slumping oil prices weigh on the energy sector because they eat into company profits.

At the same time, however, cheaper crude also help stimulate economic growth in the longer term.

“While commodities are in free fall, the major indices will take a beating in the short-term — but looking ahead should help lift the ailing economies out of the mire,” added analyst Mike McCudden at broker Interactive Investor.

The oil market has now collapsed by almost 50 per cent in value since June, weighed down by plentiful supplies, the stronger dollar and weak demand arising from the struggling global economy.

Losses accelerated in late November after the influential OPEC oil producers’ cartel decided to leave its crude output ceiling unchanged, despite oversupply and booming US shale energy production.

The market had already struck fresh lows Wednesday after OPEC also revised down its forecast for global crude demand growth next year.

OPEC said demand for its crude would fall to 28.92 million barrels a day next year, the lowest level since 2003 and at least one million barrels less than it is producing now. Yet it showed no sign of cutting production.

Markets were also hit Friday after China said industrial output expanded at its slowest pace in three months in November, while fixed asset investment, a measure of government spending on infrastructure, was also easing.