MAYOR: decline in demand from China will contribute to the fall in oil prices

MAYOR: decline in demand from China will contribute to the fall in oil prices

MOSCOW, January 11. The decline in oil demand from China, the largest consumer of energy, will contribute to falling world prices for “black gold”. This opinion was expressed by the representative of the Ministry of economic development.

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The price of a barrel of Brent crude oil fell below $32

According to him, the demand is decreasing due to the slowdown of the Chinese economy and the reorientation of the growth model from investment to consumer (oriented on domestic demand).

Risks associated with the Chinese economy, has seen investors withdraw money from emerging markets, added the Agency interlocutor.

“Expectations of a slowdown in the Chinese economy to a level not exceeding 6.5% per year, along with the devaluation of the yuan led to the fall of the stock market of China early this year, responded with a decline and the US stock market”, – said the representative of the Ministry.

In addition, factors of reduction in oil prices are lifting the ban on oil exports from the United States, as well as sanctions with Iran, added the Agency interlocutor.

From the beginning of 2016 Brent oil price decreased by 12%. Today the price of a barrel fell below 32 per barrel. The cost of futures for oil of mark Brent with delivery in February 2016 on the stock exchange ICE in London fell by 4.9% to 31,96 USD per barrel.

From the beginning of 2016. there has been a rapid collapse of the Chinese stock exchanges. The fall of the stock index Shanghai Composite index the entire week amounted to almost 15%. This index, reflecting the situation on the Shanghai stock exchange on the day lost is 5.33%, falling to values 3016,70 item. The Shenzhen Component index, which is the main indicator of business activity on the trading floor in Shenzhen, fell by 6,21% to 10212,46 item.

This situation put significant pressure on all global markets – from emerging markets to European and American markets, as well as on the Russian stock indexes.


Prices for Brent crude and the dollar

Prices for Brent crude and the dollar. Infographics