Oil prices rebound after falling below $30

In part, the falling price of oil is a symptom of the same ailment that has been pulling down stock markets: China. A 20 per cent fall in stock markets would wipe more than £300billion off the value of Britain’s biggest companies.

Prices pulled back slightly at the end of trade to end 97 cents lower at $30.44 a barrel.

More than half of the energy professionals in the United Arab Emirates expect oil prices to reach an average of $40 per barrel this year, a new survey showed.

The reason for this, as with any commodity, is a simple matter of supply and demand.

Even geopolitical flare-ups, once a guarantee to boost oil prices, aren’t exciting the energy market. One goes up, the other goes down or stays flat.

Oil price recovered modestly to the high 30s – low 31s, after dipping under $30 for the first time since 2003. For instance, the United States Short Oil (NYSEArca: DNO) tracks the opposite moves of the West Texas Intermediate crude oil futures, and the DB Crude Oil Short ETN (NYSEArca: SZO) also tracks the simple inverse of oil.

“So we’re already looking at the cheapest and lowest crude price anywhere right here in our own backyard”, he said.

Frankfurt, London and Paris indices rallied after a broadly positive session in Asia, buoyed by upbeat Chinese trade data that gave some respite from a volatile start to 2016. “It wasn’t always the case that the two assets have been moving together, but in recent times, yes, the two assets have been going together”.

“We believe refining companies such as Shanghai Petrochemical and Sinopec, and also the teapot (small independent) refineries could be big beneficiaries of this policy”, Nomura analyst Gordon Kwan said.

The unrelenting downward pressure on the crude price is taking its toll on the oil majors.

12 that the only chance for supporting oil prices is to decline the OPEC production, but considering the acceleration of Iran-Saudi Arabia issue, it seems impossible that Riyadh decreases its output.

In its 2016 budget unveiled late last month, Riyadh announced a series of spending cuts and reduction in subsidies as oil revenues shrink. Most of the increase in world oil demand over the past several years has come from China, but signs are pointing to much slower economic growth there, which in turn reduces demand for fuels made from crude.

Low prices would be a short-term benefit “but it may put constraints on China’s domestic oil production and reduce supply”, it said.

China’s oil imports in December surged 9.3% from a year earlier to 33.19 million tons, equivalent to 7.82 million barrels, easing worries over weakening demand prospects from the Asian nation.

“No doubt, the dollar is a key factor”, said Oystein Berentsen, managing director of crude oil at trading company Strong Petroleum, here, although he added that the basic price driver was oversupply. In Eau Claire, the price was $1.75 at most stations Tuesday.

The fallout from the drop in oil prices extended Tuesday to oil giant BP, which said it planned to cut about 4,000 jobs in its exploration and production unit this year.