Home / Featured / Oil falls below US$32 a barrel to hit new 12-year low: ‘China has torpedoed the hopes of optimists’
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Oil falls below US$32 a barrel to hit new 12-year low: ‘China has torpedoed the hopes of optimists’

A pump jack operates in an oil field near Corpus Christi, Tex. Oil prices continues their slide to the US$30 level.

Crude declined to a 12-year low, confirming the view of hedge funds that cut bullish price bets to the lowest since 2010.

Futures dropped as much as 6.4 per cent in New York, adding to last week’s 10 per cent slide. Speculators’ net-long position in West Texas Intermediate crude slipped 24 per cent in the week ended Jan. 5, U.S. Commodity Futures Trading Commission data show. Producer prices in China fell for a record 46th month, bolstering concern about the world’s second-biggest economy. A rapid U.S. dollar gain may send Brent oil to as low as US$20 a barrel, Morgan Stanley said.

“We want to see a sign that China has hit bottom and haven’t gotten it yet,” said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts. “I’m not convinced that Brent is likely to go to US$20 because of the stronger dollar, but it’s certainly a realistic possibility.”

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