Iran allows oil prices to fall sharply causes China to worry

Oil prices really nose-dived yesterday, Brent plunging by 6% and WTI by more than 5%. At its lowest point, Brent hit $42.23 per barrel, while WTI cost less than $38 per barrel for a time. Crude oil is thus cheaper than it has ever been in the past 6½ years, notes Commerzbank. Although prices are experiencing a recovery this morning, this is hardly worth mentioning given their recent losses. 

Yesterday's price slide was only partly related to a reappraisal of the fundamental situation on the oil market. Selling took place across the board yesterday, with total disregard for any losses, primarily amid fears of an economic slump in China. The fact that oil was the commodity to fall most heavily could be attributable to comments made by the Iranian oil minister, who asserted that his country would step up its oil production at any cost in order not to permanently lose market share, adds Commerzbank.