1. Oil prices sinks to $40, logs longest weekly losing streak in 29 years

Oil prices sinks to $40, logs longest weekly losing streak in 29 years

US oil prices dived again on Friday, threatening to dip below $40 a barrel for the first time since the financial crisis and notching their longest weekly losing streak since 1986, as a drop in Chinese manufacturing rattled global markets.

By: | Published: August 21, 2015 11:01 PM

US oil prices dived again on Friday, threatening to dip below $40 a barrel for the first time since the financial crisis and notching their longest weekly losing streak since 1986, as a drop in Chinese manufacturing rattled global markets.

World stock and currency markets joined an extended rout across raw materials this week, a slump accelerated on Friday by data showing activity in China’s factory sector shrank at its fastest pace in almost 6-1/2 years in August.

With deepening gloom over demand growth from the world’s second-biggest oil user, and expectations for a significant build-up in surplus oil stocks this autumn, dealers said most oil traders were unwilling to fight the tide.

“The market is stuck in a relentless downtrend,” said Robin Bieber, a director at London brokerage PVM Oil Associates. “The trend is down – stick with it.”

U.S. October crude fell $1.02, or 2.5 percent, to $40.29 a barrel by 11:22 a.m. EDT (1522 GMT), having touched a new 6-1/2-year low of $40.11 a barrel earlier. Front-month U.S. crude has fallen 33 percent over eight consecutive weeks of losses, the longest such losing streak since 1986.

Brent oil fell $1.28, or 2.75 percent, to $45.33 a barrel, threatening to break below $45 a barrel for the first time since March 2009.

The U.S. S&P fell about 2 percent on Friday and is down over 4 percent for the week, its worst weekly decline in at least three years. The dollar also fell, lending a small measure of support to oil prices but also suggesting a lowering of expectations of a U.S. interest rate hike in September.

In late 1985, oil prices slumped to $10 a barrel from around $30 over five months as OPEC raised output to regain market share following an increase in non-OPEC production.

Although the current collapse in oil prices, the second this year, has raised alarm within the Organization of the Petroleum Exporting Countries (OPEC), including some of its core Gulf members, there is no indication they will reverse their policy of keeping production wide open to defend market share, delegates told Reuters this week.

As a result, oil traders are looking for further signs of a slowdown in U.S. production to put a floor under the market. U.S. rig data due later on Friday will show whether oil drillers stepped up activity for a fifth straight week, which could signal unexpectedly stronger output in the coming months.

  1. K
    kushal kumar
    Aug 22, 2015 at 1:33 pm
    The ongoing turmoil in global economy is understood to have been caused by many factors , falling oil prices in international market being one such factor. This Vedic astrology writer had , as early as last year on 2 June 2014, predicted that global economy is likely to have stressful time from November 2014 to about mid -2016. Keeping in view the varying degree of stress during the said predicted time, three divisions were highlighted as follows : (1). Global economy would likely to p through a mild slowdown from November 2014 to about April 2015. (2). The stress may be intense during May 2015 to October 2015. It was said that : “ discernible concerns would surface. Definite rumbles of distress would be heard”. (3). The stress may likely be catastrophic during November 2015 to about mid- 2016. Briefly speaking, natural calamities , energy resources including oil and erroneous decisions of the rulers may be some of major causes. These predictions were made in article – Stressful times ahead for world economy in 2015 and 2016- published online at astrologyweekly. It may however, be observed here that astrological predictions made in advance are indicative of likely trends or environment and are not synonymous with determinism because an appropriate and sufficient strategy has a potential to either reduce the gravity of outcome or in some cases may even frustrate such impacts. That could be usefulness.
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