Oil prices fell for a sixth session to a new 12-year low on Monday as slowing growth in China rattled investors' hopes for demand this year and traders increased bets against any near-term recovery.
U.S. West Texas Intermediate (WTI) crude was down $1.55 at $31.61 per barrel by 11:35 a.m. EDT (1635 GMT), having fallen to the lowest level since December 2003. Brent crude futures were down by $1.76 at $31.79 a barrel, after falling to the lowest level since April 2004.
Speculators increased their net-short positions to a record high in the week to last Tuesday, in a sign that they are losing faith in a price rise anytime soon.
Analysts pointed to China's slowdown, which saw a slide in the yuan and two emergency suspensions in stock trading markets last week, as the main reasons for lower oil and commodity prices.
A pump jack and pipes at an oil field near Bakersfield, California.
Lucy Nicholson | Reuters
A pump jack and pipes at an oil field near Bakersfield, California.
On Monday, turbulence gripped Chinese markets once again, as blue-chip stocks fell by another 5 percent and overnight interest rates for the yuan outside of China soared to nearly 40 percent, their highest since the launch of the offshore market.
"If the first week is anything to go by we are in for a long, volatile and very exhausting year. The week started on a bad note and ended on a good one but the market response, worryingly, was the same to both — sell, sell, sell," David Hufton, of oil brokers PVM Oil Associates, wrote in a note.
"China has torpedoed the hopes of the optimists. The third leg of the financial crises involving emerging markets that the IMF, World Bank, BIS and various messengers of doom had warned of has come into play," he said.
Morgan Stanley said on Monday that oil prices in the $20s were possible, especially if the dollar surges more against other currencies. "A 15 percent CNY (Chinese yuan) depreciation alone could send oil into the $20s," the bank said.
CDN$ .7030... Down it goes... where it will stop... nobody knows...
[video=youtube;]http://player.cnbc.com/p/gZWlPC/cnbc_global?playertype=synd&byGuid=3000473880&size =530_298[/video]
U.S. West Texas Intermediate (WTI) crude was down $1.55 at $31.61 per barrel by 11:35 a.m. EDT (1635 GMT), having fallen to the lowest level since December 2003. Brent crude futures were down by $1.76 at $31.79 a barrel, after falling to the lowest level since April 2004.
Speculators increased their net-short positions to a record high in the week to last Tuesday, in a sign that they are losing faith in a price rise anytime soon.
Analysts pointed to China's slowdown, which saw a slide in the yuan and two emergency suspensions in stock trading markets last week, as the main reasons for lower oil and commodity prices.
A pump jack and pipes at an oil field near Bakersfield, California.
Lucy Nicholson | Reuters
A pump jack and pipes at an oil field near Bakersfield, California.
On Monday, turbulence gripped Chinese markets once again, as blue-chip stocks fell by another 5 percent and overnight interest rates for the yuan outside of China soared to nearly 40 percent, their highest since the launch of the offshore market.
"If the first week is anything to go by we are in for a long, volatile and very exhausting year. The week started on a bad note and ended on a good one but the market response, worryingly, was the same to both — sell, sell, sell," David Hufton, of oil brokers PVM Oil Associates, wrote in a note.
"China has torpedoed the hopes of the optimists. The third leg of the financial crises involving emerging markets that the IMF, World Bank, BIS and various messengers of doom had warned of has come into play," he said.
Morgan Stanley said on Monday that oil prices in the $20s were possible, especially if the dollar surges more against other currencies. "A 15 percent CNY (Chinese yuan) depreciation alone could send oil into the $20s," the bank said.
CDN$ .7030... Down it goes... where it will stop... nobody knows...
[video=youtube;]http://player.cnbc.com/p/gZWlPC/cnbc_global?playertype=synd&byGuid=3000473880&size =530_298[/video]
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