Brent at 12 year low amid concerns over China demand, Iran supply

Energy and consumer stocks bore the brunt of the selling.

Concerns about the USA economy also amplified the gloom and the Standard and Poors 500 index dipped below 1,900 for the first time since early October. The Nasdaq composite dropped 130 points, or 2.8 percent, to 4,555.

Commerzbank and BNP Paribas on Friday cut their 2016 forecasts for oil prices; the former revised its year-end expectation for Brent to $50 per barrel, down from $63, while the latter, citing economic risks, said it now expected Brent to average at $37 per barrel in 2016, $17 lower than an earlier forecast.

Oil prices lingered near $30 a barrel in Asia Thursday, with analysts warning they could fall further as a rise in USA stocks added to fears a glut in world supplies will last until next year.

Crude oil production and imports rose last week.

February Brent crude on London’s ICE Futures exchange were trading at $30.64 a barrel, down from the previous close at $30.88 a barrel. Prices slid below $30 Tuesday for the first time in 12 years. Williams Cos. tumbled $2.58, or 15.6 percent to $13.96.

Dow and S&P futures indicate a down day on Wall Street. The oil blends fell to Thursday’s closing value by over 4.5 and five percent respectively. BorgWarner lost $3.89, or 10.4 percent, to $33.51.

DRIVING DIVIDEND: General Motors rose 1 percent after the automaker raised its dividend and added to its stock repurchase program.

MetLife climbed 3.3 percent after the company said it plans to sell or spin off a large part of its life insurance business. The stock gained $1.82 to $43.81.

Russian Federation is at “record output”, Watters said, and USA shale has been surprisingly resilient.

The WTI fell below $30 a barrel on Tuesday and it was Brent s turn on Wednesday, bringing the benchmark contracts to the lowest levels in about 12 years.

A stronger dollar makes oil more pricey for purchase in other currencies, which decreases global demand. The data suggest a weakening in the yuan may be helping boost demand for Chinese products, providing welcome support for the slowing economy. The FTSE 100 of Britain rose 0.8 per cent to 5,980.29.

Japan’s Nikkei 225 Index is down 3.65 percent due to massive selling in the commodities and machinery sectors. South Korea’s Kospi was down 1.2 percent at 1,894.14.

“While the end of sanctions aren’t finalized, we’ll now be entering a world of even more supply”, said Tariq Zahir at Tyche Capital Advisors in Long Island, New York.