Richard Buxton, chief executive at Old Mutual Global Investors, says the price of crude oil has hit its floor at $40 a barrel. A price at which the veteran value investor has been buying oil stocks.

Buxton, who 12 months ago warned that the oil price would drop from $70 to $40 a barrel has told Financial News: "I wouldn't rule out a spike to lower levels. But I don't think a fall can be sustained below $40. Producers would say this price makes no sense and investors would be forced to close out their shorts.