Black Friday is Now! Don’t miss out on up to 60% OFF InvestingProCLAIM SALE

UPDATE 14-Oil tumbles up to 6 pct to new lows as China fears intensify rout

Published 25/08/2015, 07:42 am
© Reuters.  UPDATE 14-Oil tumbles up to 6 pct to new lows as China fears intensify rout
US500
-
DJI
-
CBKG
-
STAN
-
LCO
-
CL
-
TRCCRB
-

* Oil tumbles most since early July, hitting new post-2009 lows

* China equities collapse sparks global markets sell-off

* Iran says will defend market share "at any cost" (Updates intraday price lows)

By Robert Gibbons

NEW YORK, Aug 24 (Reuters) - Oil's weeks-long slump accelerated sharply on Monday with prices tumbling as much as 6 percent to fresh 6-1/2-year lows as a renewed dive in the Chinese equities market sent global financial markets into a tailspin.

A near 9-percent fall in China shares roiled global markets and sent the Dow Jones Industrial Average .DJI down more than 1,000 points in early trading. Wall Street pared losses by mid-morning, briefly easing oil's slide, but a second wave of selling re-emerged in the afternoon. MKTS/GLOB .N

Oil's biggest one-day drop in nearly two months suggested that worst-case fears over the economic outlook in China, the world's second-largest oil consumer, have eclipsed immediate signs of persistent oversupply as the main motivator.

"Today's falls are not about oil market fundamentals. It's all about China," Carsten Fritsch, senior oil analyst at Commerzbank (XETRA:CBKG) in Frankfurt, told the Reuters Global Oil Forum. "The fear is of a hard landing and that things get out of the control of the Chinese authorities."

Brent October crude LCOc1 fell $2.77, or 6.1 percent, to settle at $42.69 a barrel but fell to a contract low of $42.23 in post-settlement trading, the lowest front-month price since March 2009.

Prices extended losses in after-hours trading, as the U.S. S&P Index .SPX fell by more than 4 percent at one point.

U.S. October crude CLc1 fell $2.21 or 5.5 percent to settle at $38.24, the lowest since February 2009. The $37.75 session and contract low was the lowest since February 2009.

U.S. crude, on pace for a 18 percent monthly loss, posted its eighth consecutive weekly loss on Friday, the longest weekly losing streak since 1986.

Oil's more nearly 40 percent slump since its late-June high has set off alarm bells among some hard-hit members of OPEC, triggering some talk of an emergency meeting, although even most Gulf members see that as unlikely. ID:nL5N10Y0EG

The sentiment-driven slump took a toll across the markets, with many raw materials plumbing new lows. The 19-commodity Thomson Reuters/Core Commodity CRB Index .TRJCRB dropped nearly 2.7 percent to its lowest since late 2002.

"Macro factors are currently dominating micro factors in the oil market," analysts at Standard Chartered (LONDON:STAN) said in a report.

The focus on macro affairs has, for the moment, taken traders' minds off of the looming slowdown in crude demand this autumn, when refiners shut for seasonal work. U.S. oil inventories likely rose by 2.2 million barrels last week, extending an early build-up in excess supplies. EIA/S

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.