Oil drops 2% in Asia on China slowdown fears

By FXStreet FXStreet (Mumbai) – Oil benchmarks on both sides of Atlantic extend the recent losing streak and drop an additional 2% in Asia this Monday, having booked more than 10% loss last week.

Both crude benchmarks sold-off into China weakness

Currently, WTI drops over 1.73% to 32.58, while the Brent oil loses -0.77% to 33.30 levels, both recovering losses. Oil prices trims losses, although remains in the red on the back of resurfacing China economic slowdown concerns after several measures by the Chinese authorities have failed to stabilize volatility around the local stock markets. China is the world’s second largest consumer of oil.

Moreover, comments from Goldman Sachs further added to the bearish pressures on the oil prices. Goldman analysts noted on Friday that oil could hit $20 a barrel and that sustained lower prices are needed to in the first quarter “so producers will move budgets down to reflect $40 a barrel oil for 2016.”

In another sign of markets giving up hopes of an oil price recovery, oil market speculators increased their net-short positions to a record high in the week to last Tuesday, the US CFTC data showed on Friday.

Meanwhile, markets continue to monitor economic developments around China and now await …read more

Source:: FX Street