Reuters: Rout returns as oil slumps to lowest since 2009

Offshore staff

NEW YORK CITY Global markets were rocked for a second day on Tuesday as oil prices fell to their lowest since 2009, according to a Reuters report.

A leap in Chinese commodity imports had stabilized oil prices after they fell 6% on Monday, but the pressure returned before US trading, driving WTI crude CLc1 below $37/bbl.

European shares were down 1.6% at their lowest level since mid-October. Futures prices indicated Wall Street would open lower, too.

Currencies of major oil exporting nations such as the Canadian dollar, the Norwegian crown, and Russian rouble fell while the Yen and the Euro gained.

“If you are looking to play weak oil prices you would want to sell the Canadian dollar and the Norwegian crown,” Jeremy Stretch, head of currency strategy at CIBC World Markets, was quoted to say. “With oil prices falling and some even talking about oil falling to $30 a barrel, revenues for these countries will take a beating and hence their currencies will remain under pressure.”

Brent oil futures were testing $40 a barrel again as US crude broke $38. Since early May, crude has fallen 40%, reviving global deflationary pressure, Reuters stated.

Asian shares had been hit overnight. Tokyo’s Nikkei ended down more than 1%, even though data showed Japan dodged recession in the third quarter. Chinese stocks fell 1.8%.

Though demand for commodities grew, overall Chinese imports fell for the 13th consecutive month, declining 8.7% in November from a year earlier.


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