Oil prices plunge to lowest as US stockpiles record hike

The value of oil plunged once again on Wednesday after investors were found focusing more on the growth of global stockpiles than the increasing disturbance in the Middle East and North Africa.

The price of the global Brent oil has declined to less than US$35 (AU$49.6) per barrel. It is the lowest since the economic downturn in 2008-2009. The decline in the oil value was recorded to about two-thirds since 2014.

In spite of the news of terrorist attack on the oil storage facilities in two main Libyan ports, oil prices have seen a significant downfall. The terrorists set seven oil tanks to fire, prompting an even more disturbing situation in Libya, a primary oil producer of North Africa. The plunging oil value has reversed the overall sagging exports.

The United States stock market player, Standard & Poor’s 500-stock index, indicated a fall of 1.3 percent on Wednesday and broke the cognitively important 2,000 level to nearby 1,990.26. Apache and Southwestern Energy recorded the worst plunges in share values, along with some other oil and gas companies in the market, with a downfall of more than 10 percent.

Besides increasing US energy stockpiles, China’s weakening currency value has also added to the plunging oil value. The earlier profits for oil have witnessed nullifying effect after the People’s Bank of China declared the weakening of the yuan to the lowest on Thursday since March 2011.

“Given that oil moved directly after the fixing that would indicate Chinese demand is going to be hurt by the weaker currency...” market analyst at Melbourne’s IG Ltd., Angus Nicholson, told Bloomberg News.

The economic data has been released in China and has indicated slower growth. Oil stocks across the nation, including the strategic petroleum reserve, have been recorded at 2.1 billion barrels.