Although equities are trading modestly positive, the Chinese stock market plummet in the prior session to start the 2nd week of 2016 sent oil moving lower in parallel, signaling concerns for the world’s biggest energy user. West Texas Intermediate dropped as low as $30.41 with Brent echoing the slide to $30.42 in early trading, indicating a further downside continuation for both benchmarks. According to the International Energy Agency, consumption in China is estimated to be around 11.30 million barrels a day for 2015. As fears of onshore storage constraints come to fruition with the market dealing with chronic oversupply, the slowdown in global demand and weak economic activity from China might invariably push prices for oil and other commodities even further down. Analysts reported a major contraction in China’s demand for oil, shrinking by -4.90% in November and -2.00% on an annualized basis.
Oil Prices Slip to New Lows
Daily Analysis - 12/01/2016