Oil slides below 33 dollars a barrel

“Until we get some stabilization in oil, we’re going to have some problems in the market”, head Convergex trader Peter Coleman told CNBC.

OPEC’s smallest member Ecuador, which has increased debt and reduced investments due to the oil price plunge, said it would continue to press for production cuts at the cartel’s next meeting scheduled for June.

Trading on its stock markets was suspended for the rest of the day, the second time this week, and China’s securities regulator intervened heavily by issuing rules to restrict share sales by listed companies’ major shareholders.

US West Texas Intermediate was up 46 cents at $33.73 a barrel.

“At this point, the increased tensions between the regional powers of Saudi Arabia and Iran has limited direct impact on the oil market supply and demand fundamentals, unless the developing events cause the Iran nuclear deal to break up, although this is not expected”.

Prof Paul Stevens, an expert in petroleum economics at Chatham House, the foreign policy thinktank, said the value of oil may need to fall to $20 before some producers cut back and reduce supply.

Over the past year, the world has been producing 1.5 million barrels per day more oil than it consumes.

“Given what is likely to be some high-pitched volatility within global equities this month, we look for a closer connection between oil and the stock market for a few weeks”, said Jim Ritterbusch, of Chicago-based oil markets advisory Ritterbusch & Associates. Lower crude costs are helping boost returns for oil refiners in Asia, the region where most Middle Eastern crude is sold. Given the importance of both Saudi Arabia and Iran to the global oil markets, it’s no great surprise that tension between them are spooking the markets.

Financial markets fear the yuan’s rapid depreciation may accelerate, which would mean China’s economy is even weaker than had been imagined.

“Our production in the United States today is around 9 million barrels a day; that’s nearly doubled over the last five or six years”, Gerard said.

“I think President (Hassan) Rouhani on the Iranian side would like to calm things down and push for no further escalation”, Energy Aspects analyst Richard Mallinson said.

Shanghai stocks slid 7 percent to trigger the halt in trading, a repeat performance of Monday’s sudden tumble.