US crude West Texas Intermediate (WTI) fell to a low of $30.41 per barrel, a level last seen in December 2003, before crawling back to $31.06, down 35 cents or 1.11 percent.
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China’s oil imports in December surged 9.3% from a year earlier to 33.19 million tons, equivalent to 7.82 million barrels, easing worries over weakening demand prospects from the Asian nation. Nationwide inventories probably rose by 2 million barrels through January 8, according to a Bloomberg survey before an Energy Information Administration report.
United States crude stocks fell unexpectedly last week, data from industry group the American Petroleum Institute showed on Tuesday.
In its report the EIA said: ‘US commercial crude oil inventories increased by 0.2 million barrels from the previous week. A rapid appreciation of the USA dollar may send Brent, the global oil benchmark, to as low as $20 a barrel, Morgan Stanley said. With the US apology, it means that sanctions on Iran will be lifted and Iranian oil exports will be allowed as expected.
Brent for February settlement decreased $1.05, or 3.3 percent, to $30.50 a barrel on the London-based ICE Futures Europe exchange.
Gasoline supplies increased by 8.4 million barrels, while distillate stockpiles added 6.1 million barrels last week, according to the EIA.
The rise in the greenback, which makes dollar-priced oil more expensive for holders of weaker currencies, was also a key factor in yesterday’s price decline, analysts said.
Oil prices see dramatic fall and settle below $30, a new low that hasn’t been reached in over 12 years.
Brent crude, the global benchmark, was up 28 cents at $31.14 a barrel.
“We think prices could fall as low as $10/bbl before most of the money managers in the market conceded that matters had gone too far”, the bank said.
The world’s second biggest oil consumer has been taking advantage of the oil price rout to stock reserves and increase exports of refined products and may be set to overtake the U.S.as the world’s largest importer. The slide has cut fuel prices by a fifth since the beginning of the year and compared to mid 2014, it has fallen 70%.
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Companies like BP, which said Tuesday it is cutting 4,000 jobs, are slimming down to cope with the slump in oil, whose price has plummeted to its lowest level in 12 years and is not expected to recover significantly for months, possibly years.
