Oil has gone down more than 3 percent on Monday, which was a result of weaker Chinese equities and also the fact that new data has come out about North Sea rude production, which is adding to the oversupply worries.
On Monday, China’s main indexes closed as the investors began selling shares off in the aftermath of what was a four-day holiday for the markets. Oil right now is taking cues from China, according to the SEB chief commodity analyst Bjarne Schieldrop. Since June 2014, oil has already fallen over 60 percent, which is all the result of a supply glut globally, and the prices are swinging the past few weeks due to the worries over China’s economic slowdown. This has been causing the global stock markets to go up and down as worries begin piling up about oil and also the decrease in demand for other products and raw materials.
When it comes to commodities, the main factor influencing price is the manufacturing price index, which has fallen for the past 40 months, according to JBC Energy. It has nothing really to do with China’s GDP dropping to 7 percent instead of the normal 9 or 10 percent. Right now, the future contracts for oil fell $1.98, which would mean $47.76 a barrel, and this is a 3.73 percent loss. Oil has fallen in American to $44.25 after losing $1.80 and the trading volume was less than one-quarter of normal trading since it was a holiday. The U.S. Shale producers have kept up pumping large amounts of oil, even as the price for a barrel of oil has dropped, and the demand is not nearly as high at it once was. The Organization of the Petroleum Exporting Countries is also producing near record levels of oil, but the group is hoping to get the competition out so they become number one, with the shale producers being the biggest competition. Saudi Arabia is also looking to keep the same output, which is about 10.2 to 10.3 million barrels per day, and this is nearly a summer record high. It looks like none of the companies are paying attention to the glut, but instead are keeping their attention focused on the profits to be made in this uncertain economy.