Chinese market turmoil dragging Brent down to levels not seen since 2004
Chinese market turmoil dragging Brent down to levels not seen since 2004
January 7, 2016
Singapore Jan 7 (Reuters) - Brent crude prices slumped more than four percent on Thursday to reach levels not seen since April 2004, with the Asian market turmoil caused by falling Chinese yuan and stop trading in the Chinese stock market is an emergency for the second time this week.
The negative impact of the huge glut in supply and near-record levels of production on oil prices, which lost so far 70 percent of its value since the start also continued its downward path in June June 2014 to the detriment of companies and governments that are heavily dependent on oil revenues.
China accelerated the pace of decline in the yuan on Thursday, prompting the stock and currency markets to regional decline sharply amid fears of investors to launch the Asian giant spark competitive cuts in the price of currencies on the part of trading partners.
It was suspended for the rest of the session in the Chinese stock markets for a second day in a row after less than half an hour from the start of the session.
In a reflection of the state of weakness plaguing global markets in general Brent crude global crude measurement four percent to $ 32.75 a barrel shortly after 0600 GMT, a level not seen since April crude in April 2004.
In the United States it dropped the price of crude West Texas Intermediate futures were trading nearly four percent to $ 32.53 a barrel, its lowest level since December 2008. If West Texas crude prices fell below $ 32.40 a barrel, such as Brent it will reach to levels not seen since 2004.
Analysts said the growing US inventories is the main reason behind the decline in WTI.
It means enormous glut in stocks that even if the US production fell this year, with the curvature of the drilling companies before the storm low prices it will take many months to get rid of excess supplies.
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