FXS: Oil drops more than 3% on OPEC and global growth concerns
FXStreet (Mumbai) - Oil prices fell more than 3% on Tuesday on mounting evidence of a global growth slowdown and OPEC’s resilience to low prices.
Weak global growth and excess supply
WTI Crude for September delivery fell more than 3.5% to USD 43.28/barrel. Brent October futures declined 2.8% to USD 49.61/barrel. The concerns of a slowdown in China's economy, triggered by surprise devaluation of Yuan by the PBOC today, has been a key driver for the sharp drop in oil prices.
China's central bank made a "one-off depreciation" of nearly 2% in the Yuan after a run of poor economic data, guiding the currency to its lowest point in almost three years.
Furthermore, in a monthly report, the OPEC raised its forecast of 2015 oil supplies from non-member countries by 90,000 barrels per day (bpd). The group also said it expected no extra demand for its crude oil this year, despite faster global growth in consumption.
