Oil price slid below $33 a barrel, on Thursday, January 7, for the first time since April 2004 as a slide in Chinese shares rattled investors already concerned by near-record production and massive stockpiles of unwanted crude and refined products.
Oil prices have plunged by about 70 per cent since mid-2014, hurting oil companies and governments that rely on crude revenue.
China allowed its yuan currency to slip yesterday, sending regional currencies and stock markets globally tumbling. The offshore yuan fell to its lowest since trading started in 2010.
China’s stock markets were suspended less than half an hour after opening on Thursday after sharp falls triggered a new circuit-breaking mechanism for a second time since its introduction this week.
“Negative sentiment is hurting demand expectations, growth is easing in China and there is a spillover from the inventory build in (U.S.) gasoline stocks from yesterday and this is reflected in prices,” said Hans van Cleef, senior energy economist at ABN Amro in Amsterdam.
Brent fell more than 5 percent in early European trade to a low of $32.16 before trimming some of its losses. It was down 1.6 percent at $33.70 at 1439 GMT.
U.S. crude futures hit a low of $32.10, their lowest since late 2003, before bouncing slightly to $33.32.
Prices trimmed early losses, with violence in the Middle East and north Africa offering a measure of support for the market.
