Global crude oil prices continue to edge lower for the seventh consecutive week, posting its longest weekly losing streak in 29 years. Brent crude oil prices tumbled to just above $46 per barrel on Friday, falling by over 29 percent from the levels seen in the beginning of June.
Overall, Brent oil prices have more than halved since June last year, as the prices remain under pressure mainly due to oversupply situation.
Here are the reasons that rattling oil markets:
No Relief on Supply Glut Front
Oversupply issues continue to hit oil markets as the Organization of the Petroleum Exporting Countries (OPEC) refrain from cutting the output to defend their market shares. Further, there is no sign of reduction in oil supply in the US, which has been a main cause for a slump in prices. Recent data showed that oil inventories rose in the country despite a decline in oil rig count.
Slowing China Economy
Oil prices are also battered, slowing economic growth in the world's second largest economy, China. A batch of data published earlier this month showed the Chinese economy still remain sluggish despite many stimulus measures taken by the country's authorities in the past few months. As China is the world's second largest consumer of oil, any further indication of slowdown in its economic growth may intensify the oil price woes.
China's Yuan Devaluation
To boost its falling exports, China initiated yuan devaluation last week triggering a heavy sell-off in commodity markets including crude oil. As crude oil prices are quoted in US dollars, a yuan devaluation would make crude oil holdings unattractive.
Worries on Impending Iranian Oil Supply
Crude oil prices are also weighed down by impending oil supply from Iran, which was barred from doing so due to its nuclear activities. Iranian oil exports are expected to aggravate the oversupply concerns, once the sanctions imposed by the Western countries are lifted.
Sell-off in Global Equity Markets
Recent sell-off witnessed in major stock markets globally has also put pressure on crude oil prices. Equity markets in the US, Japan, China and other nations have posted heavy losses in the past few sessions, fuelling the concerns over the growth of the global economy. US stock markets fell to its lowest level this year on Thursday, amid intensifying worries over the country's economic growth.