WTI, Brent Crude Oil at multi-year lows on china fears

China worries hit the market again on Monday and added to the already bearish sentiment due to oversupply, leading oil prices to over six-year lows. Both oil benchmarks suffered from worries on the market related to China, experiencing the lowest levels since the beginning of the crisis.

WTI futures dropped 3.51% to trade at $39.03 a barrel on China concerns and the already high global supply. European benchmark Brent followed the bearish trend and declined 3.67% to $43.79 a barrel.

Global supply fears are still holding the oil market down. The summer season saw a strong sell-off due to Iranian concerns, as the fourth largest global oil producer added to the supply pressure after the US changed its stance and decided to lift the sanctions.

Iran Oil Minister Bijan Zanganeh stated on Sunday that an emergency OPEC meeting may be 'effective' in oil price stabilization, supported by an earlier call for such a meeting from Algeria.

On the other side of the market, China worries are largely connected to the country's demand. The world's second largest economy remains the major industrial power, consuming the major portion of oil in Asia and any changes in its demand are able to shake oil prices.

Thus the global demand, which was expected to balance out the enormous increase in supply, does not appear to be recovering so smoothly. The European Union is struggling with its own problems and weaknesses in some regions, while the United States is showing no significant decrease in its oil stockpiles during the last months. Generally, with no correction in sight on this side of the market, we can expect any gains to be limited and oil prices to remain down for a long period of time.