Oil prices drop below $30 as global markets slide
Chinese economy's poor health raises alarm with Asian markets sinking as price of oil slides to new 12-year low.
15 Jan 2016 aj
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| The Shanghai index has closed at its lowest since December 2014 [Aly Song/Reuters] |
Oil prices have fallen below $30 a barrel, a new 12-year low, amid renewed concerns of slow growth in China - the world's second largest economy.
The oil price had briefly fallen below $30 previously on Tuesday.
On Friday, US crude futures were 5.45 percent lower at $29.50 per barrel, while the March Brent contract was down 4.4 percent at $29.52 a barrel.
Global markets sank on Friday after China's Shanghai stock index dropped to its lowest level in more than one year.
The Shanghai Composite Index finished at 2,900.97, down 3.6 percent, its lowest close since December 8, 2014.
China's official Xinhua News Agency reported that banks' new yuan loans during the last month fell compared with a year earlier, in a sign that momentum for the credit that fuels economic growth was slowing.
Hong Kong's benchmark stock index closed at its lowest level in nearly three and a half years on Friday.
Al Jazeera's Rob McBride, reporting from Hong Kong, said: "The bears are predicting that it could in fact still fall further."
Our correspondent added that China GDP figures for the last quarter of 2015 are likely to show a slowdown.
"The big question for [Chinese] authorities is, will they allow that slowing process a soft landing or a hard one? On evidence from the past couple of weeks, things are starting to feel very bumpy right now."
'Deeply oversold'
In response to plummeting oil prices, several Gulf Arab states have reduced fuel subsidies.
Wall Street also sank on Friday morning, with the Nasdaq hitting its lowest since August 24 and the Dow plunging nearly 400 points, as oil prices dived.
"Oil is deeply oversold. The stock market is deeply oversold. The inability for the market to rally from deeply oversold conditions clearly tells you how weak the market is," said Adam Sarhan, chief executive of Sarhan Capital in New York.
Federal Reserve policymakers have hinted at slowing the rate hike programme should the economy not show signs of stability.
New York Fed President William Dudley said on Friday that lower oil prices and a stronger dollar have raised the risk of US inflation expectations heading lower, hurting chances of actual inflation reaching the central bank's 2 percent goal.
Source: Al Jazeera and agencies
3 comments:
s they say '' you ain't seen nothing yet ''
it is predicted that it will go as low as 10 to 20 dollars a barrel... now imagine all the people who are working for the oil companies ... they are about to be lay off royally... imagine that Walmart -- which sell the cheapest stuff in country -- closing more than 200 stores and ready to lay off another 16 000 employees... does it tell you anything about the state of the US economy-- nobody has money to spend anymore... as i said before .. khmer need to save all the money they could instead of wasting on new smart-phones and prepare ourselves [ have extra food and water ] ; the US central bank just told banks in the US that they don't need to report the truth on how much loans they have with energy/oil [ changing accounting rule to fit their need to lie]-- which means they know oil companies are about to go bankrupt and bank loans to them will not be paid... it is 2008 all over again...
I remember when oil prices was down to about $10 a barrel, it reversed that trend in less than a month [not sure of time duration] continued climbing over $100 a barrel. I wonder if this isn't same scenario once it bottom out a trend reversal occur.
When oil dipped down around $10 range it put small producers out of business. could this be same set up to put small producers out business so the big oil cartel would have the monopoly on the market?
It sure appears to be. Or a precursor to justify a war? [WW III]
We are at the mercy of world rulers, they call the shots for us and they suffer no ills while the rest of humanity are moved about with chains around our necks shackled by their policies that are meant to enslaved not as free men.
the sanction placed on Iran has been lifted and Iran is about to flood the oil market with their own oil as well...
china is buying oil from russia using their local currency [ yuan/rubble ] by passing the US dollars and banks [ swift system ] thus wall street and DC can no longer control them .. it is a plan that backfire on obama and Saudi; DC was having secret meeting with saudi to lower oil price hoping it would cause Russia to go bankrupt [ russia support syria] , but instead saudi is finding itself running out of money to subsidize its population thus increasing oil production creating more oil gluts in the market. and then there is Turkey which has been buying oil from the ISIS -supported by the obama-- at discount price to sell mostly to europe.
and after all said and done it will be the US oil companies which will pay the heavy price-- bankruptcy.. these COs need about 50 dollars barrel to break even..
another job well-done by the socialist DC.
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