Oil Prices on Tailspin www.purnartha.com

Oil Prices on Tailspin

International News

Oil Prices on Tailspin www.purnartha.comA brutal New Year selloff in oil markets quickened with prices plunging 6% to new 12-year lows as further ructions in the Chinese stock market threatened to knock crude as low as $20 a barrel. Amid an accelerating tailspin that shows no sign of slowing, Monday’s dive — the biggest one-day loss since September — triggered a rash of panicky trading across the market. Long-term futures contracts for 2017 and beyond fell nearly as hard as those for immediate delivery as some producers rushed to hedge, while a key options gauge surged to nearly its highest since 2009.
The latest catalyst was a further 5% decline in China’s blue-chip stocks and a surge in overnight interest rates for the yuan outside of China to nearly 40%, their highest since the launch of the offshore market. Technical and momentum selling added fuel to the selloff. Morgan Stanley warned that a further devaluation of the yuan could send oil prices spiralling into the $20-$25 per barrel range, extending the year’s 15% slide.