Both WTI and brent closed below $ 34 on Thursday after dipping to multi-year lows Investing.com — Crude futures continued their prolonged slide on Thursday as North Sea brent futures fell to their lowest level in 12 years, when a massive sell-off in China hours earlier exacerbated fears of weakening demand among the world’s second-largest consumer of oil.
On the New York Mercantile Exchange, WTI crude for February delivery traded in a broad range between $ 32.10 between $ 34.26 a barrel before settling at $ 33.28, down 0.69 or 2.02% on the session. At one point, futures hit their lowest level since late-2008 during the height of the Financial Crisis. Since eclipsing $ 38 a barrel on the first trading session of the year, the front month contract for WTI crude has closed in the red on four consecutive days, plunging by more than 11%.
On the Intercontinental Exchange (ICE), brent crude for February delivery wavered between $ 32.17 and $ 34.73 a barrel before closing at $ 33.77, down 0.46 or 1.36% on the day. At Thursday’s session lows, brent crude futures fell to their lowest level since 2004. Over the last month of trading, brent has plunged nearly 20% since OPEC roiled global markets by leaving its output quota unchanged at a closely-watched meeting in early-December.
traded at a premium of 0.49 over WTI at Thursday’s close, above Wednesday’s level of 0.16 at the end of trading.
In overnight trading, when its benchmark plummeted 7% within a half-hour of the start of trading, prompting its second circuit breaker in the span of four days. At 10.5 million barrels per day, China consumes more oil than any other nation in the world besides the U.S.
Crude prices worldwide have tumbled more than 70% from its June 2014 peak of $ 115 a barrel, as supply continues to greatly outpace demand.
It came one day after a bearish pulled crude futures down nearly $ 2 a barrel, representing its worst one-day fall in nearly a month. In its weekly petroleum status report, the U.S. Energy Information Agency reported a draw of 5.1 million barrels in U.S. crude inventories for the week ending on January 1, significantly below forecasts for a build of 500,000 bpd. At 482.3 million barrels, U.S. crude oil inventories remain near levels not seen for this time of year in at least the last 80 years. Although a significant draw has typically provided upside pressure for crude prices in recent months, inventories are generally drawn down in the final weeks of the year as companies look to avoid year-end tax burdens.
Meanwhile, a sectarian conflict between Saudi Arabia and Iran has weighed heavily on crude prices over the last week since Shiite cleric Nimr al-Nimr and on Saturday for reportedly speaking out against the Saudi royal family. Iran expects to raise its crude oil exports by 1 million barrels per day in 2016, after a wide range of economic sanctions against the Gulf state are eased later this year. On Wednesday, Iran foreign minister Mohammad Javad Zarif excoriated the Saudi kingdom for restraining Iranian economic growth by keeping oil prices at historically-low levels.
Crude has tumbled by more than 30% since OPEC held its production ceiling at 30 million barrels per day last November in an apparent effort by Saudi Arabia to squeeze out U.S. shale producers in order to maintain market share.
The , which measures the strength of the greenback versus a basket of six other major currencies, fell by more than 0.8% to an intraday low of 98.45. The index still remains near 12-month highs from December when it eclipsed 100.00.
Dollar-denominated commodities such as crude become more expensive for foreign purchasers when the dollar appreciates.
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Crude falls to 12-year low as China sell-off exacerbates demand fears
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