Oil prices fell to a new 12-year low today. It was reported by CNBC that this comes “as slowing growth in China rattled investors’ hopes for demand this year and traders increased bets against any near-term recovery.”
WTI was down $2.06 at $31.10 per barrel by 1:20 p.m. EDT, having briefly dipped below $31 to the lowest level since December 2003. Brent was down by $2.15 at $31.40 a barrel, after falling to the lowest level since April 2004.
“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.”
Morgan Stanley wrote 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. Monday’s decline adds to last week’s more than 10 percent drop in both Brent and WTI prices.