Crude oil prices
WTI (West Texas Intermediate) crude oil prices closed at $28.44 per barrel on January 19, 2016. They fell by 3.3%—compared prices of $29.42 per barrel for the week ending January 15, 2016. Compared to prices for the week ending January 15, Brent crude oil prices fell by 0.17%. They closed at $28.89 per barrel on January 19.
Prices are near a 13-year low
WTI crude oil prices (USO) fell by 3.3%. They closed at $28.44 per barrel on January 19, 2016. The prices were close to lows of $28.36 per barrel in 2003. The long-term supply glut in the crude oil markets caused crude oil prices to fall around 30% in 2015. Within just 20 days, crude oil prices fell more than 23% in 2016.
Turmoil in the Chinese equity market and lifting Iran’s crude oil export sanctions weighed on crude oil prices in 2016. Slow Chinese economic growth and fears about Iran’s increased production led to a huge sell-off in the markets. As a result, crude oil prices fell. Brent crude oil prices were positive during trade on January 19. Chinese crude oil imports hit a high in 2015. This raised hopes regarding the future energy demand growth in 2016. However, Chinese crude oil reserves could have a negative impact on crude oil consumption growth in 2016. Prices are expected to fall if the demand falls due to building crude reserves.
In the next part of this series, we’ll discuss why the WTI-Brent spread quickly turned from positive to negative.