Published on : Sep 14, 2015
Falling weaker than expected, Brent crude oil prices fell on Monday to its all time low. According to the Chinese data weighed on the markets, the concerns’ regarding the decline on the global demand is expected to worsen the surplus of crude.
Traders in the market also anticipated whether the U.S. central bank is expected to raise the interest rates for the first time in the past decade this week.
Analysts expect oil to fall as strongly as a hard dollar. Should interest rates rise, this would undermine the demand from importing countries. Since June 2014, oil prices have declined nearly 60% on the biggest surplus across the globe in these recent times. There have been concerns about the slow Chinese economy too.
Growth in the investment and factory output almost missed the forecasts in August in China. According to a recent run from the global data, the chances that third-quarter economic growth may decline below 7% for the first time since the financial crisis.
There has been extremely broad-based reaction to the country’s industrial, commodities, metals, and equities, said an analyst. Brent crude futures were low 38 cents at $47.76 per barrel.
The IEA said last week that the current production cuts would lead to a rebalancing of the oil market by 2016.
The U.S. oil rig count declined 10 to 652 last week. Many banks are considering on cutting their oil price forecasts.
The supply and demand pictures are less favorable over the coming months. Outside the U.S. oil fundamentals seem to be declining seasonally.
Most producers arise from the fact that 2016 oil and gas prices are unlikely for a significant recovery. In addition, Kuwait and Iran have cut down their crude prices against Saudi Arabia.