Oil is tumbling once again as the market rout which kicked off 2016 looks set to continue into a second week.
First thing on Monday, both major oil benchmarks dropped by more than 2%, but recovered recovered a little by around 9:00 a.m. GMT (4:00 a.m. ET) hovering at losses of around 1.4%, with Brent slightly over, and US crude slightly under.
Both benchmarks are now back close to their early losses, with the American benchmark, West Texas Intermediate crude slipping 1.8% as of 10:40 a.m. GMT (5:40 a.m. ET). European, or Brent, crude has slipped by 2.1% on the day, with the cost per barrel at $33.22 (£22.80).
Here’s how Brent crude looks like this morning:
And this is what WTI is doing:
Oil’s continued fall looks to be partly thanks to the continuing slump in the Chinese stock markets. Last week, Chinese equities bounced all over the place, spending a lot of time in the red, and twice triggering the country’s so-called “circuit-breaker” — a measure put in place to temporarily shut the markets if prices fall too far.
Authorities then decided to stop using the measure, after fears that it was making the market rout even worse.
At the close in China, two of the country’s biggest indexes, the CSI 300, and the China A50, saw big drops. The CSI closed down by just north of 5%, while the A50, dropped by 4%.
Add to this continuing tensions in the Middle East, and its no surprise that the second week of trading in 2016 has started just as badly as the first.