Oil slides to 11-year low

quist

January 6, 2016 2:31 PM

The slump in oil prices follows the fall in the Chinese stock market, which fell seven percent Monday morning due to a drop in manufacturing activity.

Oil prices fell to its lowest in 11 years on Wednesday amid tension in the Middle East between Iran and Saudi Arabia.

Market watchers expected rise in oil prices over the spat between the two nations after Saudi Arabia's execution of a prominent Shiite cleric. Sunni nations allied with Riyadh severed diplomatic ties with Iran, as Tehran voiced outrage over the death.

Speculations were also rife that OPEC might cut production to force prices up but the current tension between Iran and Saudi Arabia, both OPEC members, has dampened any such hopes.

"There are rising stockpiles and the tension between Iran and Saudi Arabia make any deal on production unlikely," said Michael Hewson, chief market analyst at told Reuters.

Global Brent crude benchmarks were at $34.93 a barrel at 12300 GMT, down 1.5 percent from the day before and the lowest since 2004. US crude futures subsided 46 cents to $35.95 per barrel, continuing their slide from Tuesday.

U.S. crude futures were down $1.25 cents at $34.72 a barrel after slipping 79 cents the previous day.

Enhance Your Pulse News Experience!

Get rewards worth up to $20 when selected to participate in our exclusive focus group. Your input will help us to make informed decisions that align with your needs and preferences.

I've got feedback!

quist