U.S. stock market collapsing as global currency war heats up
Amid a global financial system that remains in flux, oil prices tanked Friday as well, sending prices below $40 a barrel for the first time since the Global Recession was at its peak in 2009.
Prices touched a six-and-a-half year low of $39.86 a barrel for a brief period, rising above $40 to settle around just above that mark by early afternoon, according to Reuters and Bloomberg Business.
Bloomberg reported further:
Prices have tumbled almost 35 percent since this year’s peak in June as producers maintain output even after an oversupply pushed prices into a bear market. U.S. benchmark West Texas Intermediate may drop to $32 on the persisting global surplus, Citigroup Inc. said in a report Aug. 19. Concerns that China’s economic growth will reduce demand also weighed on futures.
“It’s clear that the major producers, the Saudis, Russians, the U.S. and others, are battling for market share,” John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund, told Bloomberg by phone.
The fall in oil prices is due in large part to a growing glut as producers continue to maintain production in a bid to retain as much of the market as possible.
As noted by the U.S. Energy Information Administration, crude supplies in the U.S. rose 2.62 million barrels last week alone. That unexpected gain in the U.S. supply followed signs that OPEC members were actually planning to boost production.