“American benchmark WTI crude briefly slipped below $40 per barrel for the first time since 2009, showing an eighth straight weekly decline , the longest streak in almost 30 years,” RT reports.
According to the news agency:
During the intraday trading in New York, the benchmark WTI crude price dropped as low as $39.86 per barrel before settling at $40.45 – some 2.1% drop in one day. At the same time the global benchmark Brent fell 2.5% down to $45.46 per barrel.
While demand remains strong, shrinkage of Chinese manufacturing sector and recent yuan devaluation have sent shockwaves across the global markets, not only the oil one. The Dow Jones industrial average and the Nasdaq Composite suffered their biggest weekly losses since September 2011.
OPEC countries are pumping oil at near-record levels – about 32 million barrels per day in July.
CNBC experts saw oil price as low as $30 a barrel a week ago.
West Texas Intermediate crude futures broke below their 2015 low this week and are trading around $42, a more-than-six-year low. The bottom in this market has been elusive, with Wall Street targets consistent in that they have been missing the mark, as oil plunged into the $40s after roaring back to the $60s in a head fake rally during the spring.
Now, the next mile marker for the futures market appears to be on the downside, with oil heading toward the $40-per-barrel level. Many traders then expect to see prices settle somewhere in the $30s before a bottom is reached.
According to report published by Citigroup in February, oil as cheap as $20 a barrel could be around the corner in 2015 while Gary Shilling, a US consultant, suggested prices could drop as low as $10 per barrel.
Of course, quite how low prices can actually fall partly depends on which producer you’re speaking to. While developing economies such as Venezuela have high costs, meaning anything under $125 per barrel is a bit of a stretch, many super-efficient producers in the US and the Persian Gulf could keep going, even if prices drop below $20 – for some, that figure’s as low as $10,”
City AM reported.
Also according to Business Insider we may go back to $15 or $20 oil price level:
Oil prices have hit six-year lows, and Cumberland Advisors’ David Kotok thinks the worst may be yet to come.
“We could go back to $15 or $20, this is a downward slope, we don’t know a bottom,” he said Monday.