How low can the oil price go - and what is the impact?

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The oil price has tumbled again, with Brent crude sinking by 4.2% to $34.88 a barrel on Wednesday, taking the price to its lowest level since 1 July 2004.

But how much further could the price fall? What could be the factors that might lead to a recovery? And how much longer can the current volatility last?

Is North Sea oil production viable at $35 a barrel or below?

To some extent we already know the answer. There have been thousands of job losses in the North Sea oil industry and the major producers have scaled back billions of pounds of investment in exploration.

So far, oil majors such as BP, Shell, Total, and Exxon Mobil have weathered the storm created by the collapse in the price of Brent crude.

But Jeremy Batstone-Carr, chief economist at Charles Stanley, warns that continuing low prices, or even further falls, could really start hurting big firms.

The first clue that they are starting to suffer, he suggests, will be if they cut dividend payments to investors, something they have been able to avoid so far.

Meanwhile, Alan Gelder, of oil analysts Wood Mackenzie, says lots of North Sea oil operators are "beginning to really feel the pain" at $35 per barrel.

At this price, he says, thanks to the fact the many North Sea operators have cut costs, firms can just about survive. But "there is no money left for future investment", he warns.

And the price of oil is nowhere near stable.

Mr Batstone-Carr says he could see oil prices fall to around $30 per barrel and stay there for most of this year.

A major problem is that there is just too much oil being pumped around the world.

How long can US fracking survive?

Paul Stevens, professor emeritus at the University of Dundee, and a Middle East specialist, says the price of oil could theoretically fall to as little at $20 to $25 per barrel.

Why? It may be an unusual view but he thinks most US shale oil producers can tolerate current oil prices.

Yes, they may make a small loss - he estimates the cost of production at around $40 per barrel for shale producers - but until the price falls to around $25 a barrel they won't stop production, he says.

Mr Gelder, however, can't see too many US shale operators being able to continue production below $50 to $60.

"There are some sweet spots in the US where some operators are able to keep production going at lower levels, but it's not economic at under $30," he says.

But, he adds, there is another, much bigger, problem than the future of fracking in the US.

"An awful lot of oil producers can't survive at these levels," he says. "Venezuela, Algeria, Nigeria are facing serious financial problems and political unrest with people out of work and prices rising."

He adds that a great level of unrest might add a geopolitical unrest - and consequent worries about supplies - might push prices higher. But not by much, he says.

How much oil is being bought at these prices?

Oil is so oversupplied globally that countries are running out of storage. The US, which is thought to have among the largest storage facilities in the world, has nowhere left to keep it. And it's not the only country, says professor Stevens.

"Storage is pretty much full and people are already talking about buying tankers as floating storage," he says. "But if supply continues to outstrip demand, then the only thing that you can do with the oil is sell it, which inevitably pushes the price down."

Mr Gelder takes a different view, suggesting it's not entirely clear whether US storage is completely full. "We know about US and European storage levels," he adds. "But India and China are strategically storing oil for supply disruptions,"

Mr Batstone-Carr adds: "Without a marked reduction in output nothing will change, and we have to wait until June for the next Opec meeting before we might see a reduction in quotas.

"And all of this comes at a time when economic activity is on the back foot, signalling there's not a lot of demand out there."

Professor Stevens warns that the collapse in the oil price is the result of oil - as a commodity - being "freely traded for the first time since 1928".

That, he says, is because Saudi Arabia has decided not to cut production to support prices - unlike during previous oil gluts.

Saudi Arabia vs Iran: What could it do to oil prices?

It is just over four years since the US imposed sanctions on oil imports from Iran, helping to bolster that floor and enabling Saudi Arabia to grab the market share that it is now very reluctant to give up.

A report from Wood Mackenzie says "Saudi Arabia would continue to seek market share and would not cut its output to make room for Iran.

"Unless other producers such as Russia, Iran and Iraq agree to reduce their oil production, Saudi Arabia has consistently stated since the November 2014 Opec meeting, it has no intention of cutting its supply to support oil prices.

"The current ramping up in tensions between Saudi Arabia and Iran only further confirms our view that Saudi Arabia is unlikely to cut its output to help Iran regain market share," the report says.

Professor Stevens says tensions in Middle East are "as high as you could have them without having outright war. I don't think things have been as bad since 1918 and the fall of the Ottoman Empire."

Such uncertainty normally sparks an oil price spike. But apart from a rise over the New Year, prices have continued lower.

Mr Gelder says most oil traders shrugged off the possibility of Saudi Arabia and Iran squaring up to one another in a way that could seriously impact supplies.

And with demand for oil weakening, especially in China and emerging markets, there seems little reason to expect that prices are set to drive higher any time soon.

Additional reporting by Tom Espiner.