Oil prices are back on a downward path on Friday amid downturn in global equity markets and a sharp slowdown in Chinese industrial sector, and the American WTI is ready to show the longest series of weekly falls since 1986.
China's manufacturing sector in August showed the highest rate of decline of activity in the past 6.5 years due to compression of domestic demand and exports, according to a private study. The data reinforce concerns over oil demand in the second largest consumer.
Asian stocks are also located in the red zone on Friday due to concerns over global economic growth.
Indicative oil varieties are traded at a minimum of six and a half years, and the American type can complete the eighth consecutive week of decline that would be an anti-record since 1986.
At the end of 1985, oil prices fell to $ 10 from about $ 30 per barrel in five months since OPEC raised production to retain market share after growth in production in countries outside the cartel.
October futures for US crude went down 32 cents to $ 41.00 a barrel. September contracts, expiration of which was on Thursday, rose 34 cents. On Thursday, WTI has reached a minimum of six and a half years – at $ 40.21.
Brent crude oil is ready to complete the seventh week of the last eight in the red zone, being traded today at $ 46.22, which is 40 cents cheaper and fell on Thursday by 54 cents.
Some support to oil quotations comes from the dollar which continues to fall due to the revision by the market of the probability to increase Fed's key rate in September after the publication of the July meeting minutes.
The reserves of black gold in the United States increased again last week, due to the growth of imports and not as soon as expected, the decline in production of shale oil.
"The only positive thing from the United States is still high levels of oil refining and continuing decline in production", - is said in a research note of Singaporean Philip Futures.
However, despite the oil prices, some mutual funds do not refuse to invest in oil exploration and production in the United States, hoping that production will fall sharply over the next 12 months and it will be the basis for a rebound of quotations to $ 65-70 per barrel.