On the New York Mercantile Exchange, light, sweet crude futures for delivery in February traded at $30.68 a barrel at 0319 GMT, down 52 cents in the Globex electronic session. So far, the futures had lost 4.27%, sending the United States Brent Oil Fund, LP (NYSEARCA:BNO) trading down 4.09%.
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The March Brent LCOc1 contract was down $1.15 at $29.73 a barrel.
Before rebounding, global crude benchmark Brent broke below $30 a barrel for a second straight day.
The broad-based S&P 500 fell 57.42 (2.99 percent) to 1,864.42, while the tech-rich Nasdaq Composite Index plummeted 174.93 (3.79 percent) to 4,440.08.
Market participants continued to keep an eye on China’s yuan. The rout today is one of many seen by the Chinese equity markets in the past, with some instances being driven by manufacturing data.
It comes after USA stockpile stats failed to spark a revival, Russian Federation warned it may revise budgets, and as the prospect of worldwide exports from Iranian crude moved onto the horizon.
Iran stated that its exports will rise by 1 million barrels a day within the first six months of the sanctions being lifted.
South Korea along with other major Iranian crude buyers should import the crude no more than the level imported in 2014 under the sanctions imposed on Tehran against its nuclear program.
“The oil supply glut in juxtaposition with the lessening demand is wholly more hard to contain and with Iran set further to increase volumes following the lift of sanctions, the trend remains to the downside”, said Brenda Kelly, head analyst at London Capital Group, in a note. “It is possible that we’re now looking at a floor forming”.
The Organization of the Petroleum Exporting Countries (OPEC) decided on against cutting output last December. That stance was reaffirmed after the December 4 meeting.
FRAYED NERVES: Oil prices at 12-year lows and the volatile start to 2016 in China’s stock and currency markets have unleashed a torrent of negativity among investors.
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“This is three or four months ahead of what the market was thinking a year ago, so it just adds fuel to the fire”, Mitsubishi Corp oil risk manager Tony Nunan told Reuters. Inventory levels reached an all-time high in April, last year.
