Global equity, commodity markets drop after China weakens Yuan EIA to report U.S. crude, gasoline supply gains: survey shows Share on Facebook Share on Twitter Brent crude dropped to an 11-year low amid concern that China’s weakening economy will curb crude demand in 2016. Futures fell as much as 5.1 percent in London. Global equities and commodities slid after China’s central bank reduced the value of the yuan, a reminder of the depreciation in August that sparked a wave of financial-market turmoil. The Energy Information Administration will probably report U.S. crude supplies rose by 500,000 barrels last week, according to a Bloomberg survey. The industry-funded American Petroleum Institute said stockpiles fell on Tuesday. Oil prices have shrugged off rising tension between Iran and Saudi Arabia as supplies continue to outstrip demand. Analysts from Citigroup Inc. to UBS Group AG predict crude may approach $30 in the coming months, while U.S. inventories remain more than 130 million barrels above the five-year seasonal average. "The catalyst of today’s move is concern that the Chinese economic slowdown will worsen, reducing oil demand," said Gene McGillian, a senior analyst at Tradition Energy in Stamford, Connecticut. "We shrugged off the drop in supplies in yesterday’s API and headed to a new 11-year low in Brent. Both Brent and WTI are below $35 and moving lower." Brent for February settlement fell $1.73, or 4.8 percent, to $34.69 a barrel on the London-based ICE Futures Europe exchange at 9:08 a.m. in New York. Futures slipped to $34.56, the lowest since July 2004. Total volume traded was 77 percent higher than the 100-day average. West Texas Intermediate for February delivery slipped $1.33, or 3.7 percent, to $34.64 a barrel on the New York Mercantile Exchange. It touched $34.48, the lowest since Dec. 21, when the contract hit a 6-year low. Prices fell 30 percent last year. Crude inventories at Cushing, Oklahoma, the delivery point for WTI futures and the biggest U.S. oil-storage hub, increased by 1.37 million barrels last week, the API reported Tuesday, according to Twitter postings and a person familiar with the numbers. Nationwide gasoline supplies rose by 7.1 million barrels and distillates by 5.6 million barrels. Oil’s collapse may increase borrowing costs for producers as revenue falls. Oil-rich Alaska had its credit rating cut by Standard & Poor’s as low prices left the state with a growing gap in its budget. Moody’s Investors Service said Tuesday that metals and energy producer Freeport-McMoRan Inc.’s debt is under review for possible downgrade.

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