Oil prices fell for a sixth session to trade at almost 12-year lows on Monday as concerns about China’s economic slowdown, reflected in a renewed slide in its stock markets, weighed on the outlook for demand this year.
Traders increased bets against any near-term recovery in the oil price and Brent crude futures were down by 63 cents at $32.92 a barrel by 1200 GMT, off 15 percent in a week. U.S. West Texas Intermediate (WTI) crude futures fell 48 cents to $32.68.
Speculators increased their net short positions to a record high in the week to last Tuesday, data showed on Friday, in a sign that they are losing faith in a price rise any time soon.
Analysts pointed to China’s economic slowdown, which has seen the yuan weaken and two emergency suspensions in Chinese equity markets last week, as the main reasons for lower oil and commodity prices.
On Monday, turbulence gripped Chinese markets again, as blue-chip stocks fell by another 5 percent and overnight interest rates for the yuan outside of China soared to nearly 40 percent, their highest since the launch of the offshore market.
“If the first week is anything to go by we are in for a long, volatile and very exhausting year. The week started on a bad note and ended on a good one but the market response, worryingly, was the same to both – sell, sell, sell,” David Hufton, of oil brokers PVM Oil Associates, said in a note.