Oil turned negative on the news from China


Moscow. On 4 January. Oil prices have moved from growth to decline in the course of trading Monday amid downbeat data on China’s processing industry and the collapse of the stock market of China, which led to early termination of trading, Bloomberg reported.

However, the fall keep the news from the Middle East: Saudi Arabia broke off diplomatic relations with Iran after the attack on the Saudi Embassy in Tehran.

The cost of the February futures for Brent crude on London’s ICE Futures exchange at 11:50 Moscow time fell by 6 cents (0.16 percent) to $37,22 per barrel.

Futures price for WTI crude oil for February in electronic trading on the new York Mercantile exchange (NYMEX) decreased by this time $0,11 (0,30%) to $36,93 per barrel.

The index of “blue chips” of the Shanghai and Shenzhen CSI 300 has lost 7%, which regulators have used a new mechanism for interruption of trading on the first day of work. From January 4th on the stock exchanges of mainland China operations are suspended for 15 minutes in case of fluctuations in the CSI 300 more than 5%, if you change more than 7% the auction ends before the end of the day.

China PMI

The official purchasing managers index (PMI) processing industry in China last month rose to 49.7 points from November’s 49.6 per item. Analysts polled by Bloomberg, expected a more significant rise to 49.8 points.

The PMI value less than 50 indicates contraction in business activity and volumes of production.

The narrower the index, published by Caixin Media and Markit Economics unexpectedly dropped, it remained in negative territory for the 10th month in a row. The indicator fell in December to 48.2 in November from 48.6 points, while the market was counting on his rise to 48.9 points.

Saudi Arabia and Iran

According to a statement on Sunday, Saudi foreign Minister Adel al-Jubara, all Iranian diplomats must leave Saudi Arabia within 48 hours.

As the causes of the gap, the foreign Minister of Saudi Arabia called the attack a crowd of demonstrators at the Saudi Embassy in Tehran, said “bi-Bi-si”.

Previously Saudi Arabia had executed 47 people sentenced on charges of terrorism, among which was a famous Shiite preacher Nimr al-Nimr. On Saturday, Iran’s foreign Ministry summoned chargĂ© d’affaires of Saudi Arabia to Tehran to Lodge a protest in connection with the execution of an-Nimr.

In Tehran, protesters attacked the Saudi Embassy, pelted the building with Molotov cocktails. Police had to use tear gas to oust protesters from the Embassy. According to Iranian media, was arrested 40 people.

According to the International energy Agency (IEA), the share of Middle East countries account for around 30% of world production of oil. Saudi Arabia ranks first in oil production among OPEC countries, Iran is the fifth. Almost all of the middle East conflict, Tehran and Riyadh hold opposing points of view.

The fall in oil prices in 2014-2015 was the most significant in the history of observations on the background of excess supply of energy. Brent oil fell last year to 35% after the crash at 48% a year earlier, WTI completed in 2015 with a price around 30% lower than at its beginning.