Oil drops to four month low

FXStreet (Mumbai) – Oil prices at both the sides of the Atlantic fell to four month low due to the rout in Chinese stock markets and fresh evidence of excess oil supply.

Front month Brent crude futures fell to a low of USD 53.36/barrel, its lowest in more than four months. On similar lines, WTI Crude hit a low of USD 47.23/barrel.

The Chinese equity markets fell more than 8%, its worst single day loss since 2007. The drop may be an indication that the unprecedented measures announced by the Chinese government may not be enough to avert further losses. Meanwhile, the bearish pressure on oil increased on Friday after the data showed that US oil rig count increased by 21; its highest since April 2014.

However, the losses have been capped to some extent due to the weakness in the USD index; down 0.8% so far in the day.

Oil prices at both the sides of the Atlantic fell to four month low due to the rout in Chinese stock markets and fresh evidence of excess oil supply.

(Market News Provided by FXstreet)