On the Intercontinental Exchange (ICE), brent crude for February delivery wavered between $32.80 and $34.70 a barrel, before closing at $33.56, down 0.19 or 0.56% on the session.
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When U.S. investment bank Goldman Sachs said previous year that oil could fall as low as US$20 per barrel, it assigned a fairly low probability to that scenario.
Tracking this, Brent rose 58 cents to $34.33 a barrel by 0327 GMT, near an intraday high of $34.72.
The global economy will sputter along this year as China’s slowdown prolongs a commodity slump, the World Bank said Wednesday.
China’s stock market was suspended again on Thursday after less than half an hour of trading after triggering the new circuit-breaker which closes markets if stocks fall seven per cent.
Oil prices plunged close to $33 a barrel today as crude extended losses on rising USA energy stockpiles and China’s weakening currency. Brent meanwhile sank to $32.16, its lowest point since April 2004.
West Texas Intermediate, the USA benchmark, slid to $32.10 a barrel in early morning trading in NY – the lowest level since December 2003 – before recovering to $32.81 a barrel.
Hansen also noted that United States inventory levels are more than 100 million barrels above the five-year average, and storage facilities, which are approaching their capacity limits, may soon have to push oil away at even lower prices.
The number of USA oil-drilling rigs, which is viewed as a proxy for activity in the oil industry, has fallen sharply since oil prices started falling past year.
“The trigger for the latest slide in oil prices has, of course, been anxious about global demand, prompted by the concerns over China”, Julian Jessop, Chief Global Economist at the company said in a report obtained by Trend.
However, others say such assumptions could be exaggerated because the Chinese government and local refiners will continue to take advantage of the current cheap oil to fill up their storages, keeping Chinese demand elevated.
“The supports are crumbling; there is not a winning long in the market – maximum pain is lower”, Robin Bieber, director of the London brokerage PVM Oil Associates, told Reuters Thursday.
“The market trades on greed and fear, and right now fear dominates greed”, said Gordon Kwan, a Hong Kong-based analyst at Nomura. “Every time they fix the midpoint you see this immediate move into USA dollar buying as the global currency market tries to reweight themselves”.
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The US crude output increased unexpectedly last week to 9.219 million barrels a day according to the US Energy Information Agency.
