Crude Oil Prices Caught In A Deadly Downward Spiral: Major Benchmarks Decline More Than 6 Per Cent In One Day

Crude Oil Prices Caught In A Deadly Downward Spiral: Major Benchmarks Decline More Than 6 Per Cent In One DayCrude options traders at the New York Mercantile Exchange in 2009. (Photo by Spencer Platt/Getty Images)

Global oil prices witnessed a sharp fall yesterday (Monday, 24 December), with US crude futures and well-known international benchmark Brent Crude, declining by more than 6 per cent, reports Mint. Crude prices have now collapsed to their lowest levels seen since 2017, on track to witness a decline of 40 per cent in the fourth quarter.

“What’s happening in the stock market is raising fears that the economy is grinding to a halt and thereby will basically kill any future oil demand,” remarked an analyst at the Chicago-based Price Futures Group, Phil Flynn.

US crude futures have been hit hard due to fears of a global downturn caused by escalating trade tensions with China. Brent crude is now at its nadir since August 17 2017.

Apart from oil, other markets have also not been spared the rapid spread of bearish sentiments. Globally, stocks ended up in the negative for the eighth straight trading day.

These developments come on the heels of a partial government shutdown taking place in the US due to a deadlock between President Donald Trump and the Senate about releasing funds for a border wall with Mexico.

Brent crude declined 6.2 per cent or around $ 3.35, to $50.47 per barrel, while American crude futures fell 6.7 per cent or about $3.06 to settle at $42.53.

Equities across international markets have fallen almost 9.5 per cent this month along, the biggest one month decline since the euro-zone debt crisis in September 2011.

Organisation of the Petroleum Exporting Countries (OPEC) and Russia, rattled by the steep reverses in crude markets, plan to reduce oil production by 1.2 million barrels per day from January onward.