Oil price crashes to $33 – and could go as low as $18 | The Week UK

Oil price crashes to $33 – and could go as low as $18 | The Week UK:

"The sharp jump in the oil price to close to $39 a barrel on Monday, in the wake of the execution of a senior Muslim cleric in Saudi Arabia that prompted sectarian violence and a stand-off with Iran, seems like a long time ago.

Since the rally ran out of steam in the afternoon session on the first day of the week in New York, oil has been tumbling and yesterday, it crashed to the latest lows for more than a decade. The first milestone saw international benchmark Brent crude fall below $35 for the first time since 2004 in mid-afternoon in London, while in the overnight trading sessions in the US and Asia, it eventually hit a near 12-year nadir just above $32.

Traders have bucked the historic trend of buying into oil futures when Middle Eastern tensions rise because there is now a broad consensus the unrest is as likely to be a harbinger of greater oil supply, rather than less. Saudi Arabia and Iran are key members of the powerful Opec cartel and the diplomatic breakdown will surely prevent any harmony on policy to end the global oil glut."



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