Brent dips to new low with Chinese yuan depreciation

ANKARA

Crude oil prices fell to new lows on Thursday below 2004 levels, due to the depreciation of the Chinese yuan, rising conflict between Saudi Arabia and Iran and the U.S. stockpile rise.

Brent crude oil prices slipped to as low as $32.19 per barrel on Thursday around 7:35 a.m. GMT, a fall of 6.37 percent, according to official figures.

China accelerated the depreciation of the yuan on Thursday and stock markets were suspended for the rest of the day.

The slowing Chinese economy and depreciation of the yuan raised concerns that China would retreat from the crude market due to less energy demand.

The possibility of cutting oil production to maintain prices diminished following the rift between the two major OPEC countries, Saudi Arabia and Iran.

The prices had risen to almost $39 per barrel on Monday after Saudi Arabia executed a prominent Shi'ite cleric due to terrorism charges. This action faced outrage from Iranian officials and caused the two countries to break their diplomatic ties after two Saudi missions in Iran were attacked.

As a result, relations between the two countries caused a fall in the crude oil price, hitting lows of below $33, from $37.22 on Monday, a fall of 13.5 percent in total.

Supply glut in the market continues to lower prices

Iranian officials have repeatedly announced their will to increase oil exports as sanctions on the country are about to be removed. Consequently, more crude will be added to the already over-supplied market.

The U.S. government also announced data on Wednesday that showed a rise in gasoline stocks by 10.6 million barrels, more than expectations of analysts.

U.S. stockpiles of gasoline and distillates, including diesel fuel and heating oil, rose in the week ending Jan. 1, and pushed total inventories of crude and refined products to a record high, the U.S. Energy Information Administration said Wednesday.

West Texas Intermediate oil price was also down to as low as $32.20 percent Thursday around 7:30 a.m. GMT.