Oil Falls Below $40 a Barrel for First Time Since 2009

23-Aug-2015

Oil plunged below $40 a barrel in New York for the first time in more than six years, extending the longest decline since 1986 on concern slower demand growth will prolong a global glut.

Prices have tumbled almost 35 percent since this year’s highest close in June as producers pump away even after an oversupply pushed prices into a bear market. West Texas Intermediate may drop to $32 on the persisting surplus, Citigroup Inc. said Wednesday. Meanwhile, concern that China’s economy will slow increases expectation that demand will wane.
“It’s clear that the major producers, the Saudis, Russians, the U.S. and others, are battling for market share,” John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund, said by phone.

An unexpected crude inventory gain in the U.S. last week followed signs that OPEC members are planning to boost production. A manufacturing gauge in China, the world’s second-largest oil consumer, sank to the lowest level since the financial crisis. (by  Moming Zhou and Mark Shenk, Bloomberg Business)