• 6 minutes Corporations Are Buying More Renewables Than Ever
  • 17 minutes WTI @ 67.50, charts show $62.50 next
  • 23 minutes Starvation, horror in Venezuela
  • 5 mins Permian already crested the productivity bell curve - downward now to Tier 2 geological locations
  • 1 day Desperate Call or... Erdogan Says Turkey Will Boycott U.S. Electronics
  • 23 hours Renewable Energy Could "Effectively Be Free" by 2030
  • 24 hours Saudi Fund Wants to Take Tesla Private?
  • 1 day Mike Shellman's musings on "Cartoon of the Week"
  • 2 days Venezuela set to raise gasoline prices to international levels.
  • 2 days The Discount Airline Model Is Coming for Europe’s Railways
  • 2 days Pakistan: "Heart" Of Terrorism and Global Threat
  • 1 day Are Trump's steel tariffs working? Seems they are!
  • 2 days Scottish Battery ‘Breakthrough’ Could Charge Electric Cars In Seconds
  • 17 hours Why hydrogen economics does not work
  • 6 hours Hey Oil Bulls - How Long Till Increasing Oil Prices and Strengthening Dollar Start Killing Demand in Developing Countries?
  • 16 hours China goes against US natural gas
Alt Text

Oil Prices Jump As Saudis Cap Oil Supply

Oil prices rose on Tuesday…

Alt Text

Saudi Arabia And Iran Reignite The Oil Price War

As U.S. sanctions on Tehran…

Alt Text

Turkey Turmoil Drags Oil Down

While Turkey might not be…

Charles Kennedy

Charles Kennedy

Charles is a writer for Oilprice.com

More Info

Trending Discussions

China’s Stock Market Meltdown Dragging Global Markets With It

China’s Stock Market Meltdown Dragging Global Markets With It

Global market upheaval continues to inflict damage across the energy industry.

The Shanghai Composite fell by 8.5 percent, and that has sent shockwaves around the world. The Dow Jones Industrial Average plummeted by over 1,000 points on August 24, before recovering some ground. The Stoxx Europe 600 fell 7.3 percent. The DAX index in Germany lost 6.5 percent. The U.K.’s FTSE lost nearly 5 percent.

The Chinese government has fitfully and erratically intervened to prop up the stock markets since June, with crack downs on short selling, a devaluation of the currency, and injections of new liquidity into the market. The moves have been confusing, and the perception of control and poise by the Chinese leadership is starting to fall away. Related: This JV Could Trigger A Shale Boom In An Unexpected Venue

Meanwhile, the meltdown in commodity prices continues. Prices have tanked in part because of the significant slowing in the Chinese economy, and picked up pace on August 24 as the problems have accelerated.

WTI dropped below $39 per barrel during midday trading, off 4 percent. Brent also dropped more than 4 percent, to just $43.43 per barrel. A sell off is occurring for the share prices of energy companies across the board. BP’s stock price was down 5 percent on Monday. ConocoPhillips, Statoil, and French oil giant Total saw their share price drop by a similar percentage. Related: Oil Price Collapse Triggers Currency Crisis In Emerging Markets

The fear is that the problems are a sign of something much bigger and much worse than simply a slowing GDP rate in China. If the stock market meltdown is followed by a broader economic crash, that would spell trouble for economies around the world. Emerging markets would be hit first. Their economies are dependent on selling commodities to China. The crash in prices has already hurt growth, but the troubles would deepen if China’s economy continues to crater. Related: Why Water Is More Important To Iran’s Future Than Oil

Of course, as the world’s second largest economy, few countries will be left unscathed.

For oil, that raises the possibility that prices continue to decline. Just a few months ago, few would have predicted that WTI would drop below $40 per barrel, eclipsing the low points seen in early 2015. So, there is little reason to think that further drops are out of the question. Suddenly, oil prices below $30 per barrel do not seem outside of the realm of possibility.

By Charles Kennedy of Oilprice.com

More Top Reads From Oilprice.com:




Back to homepage

Trending Discussions


Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News