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While analysts, economists and investors are eagerly waiting to see whether the Federal Reserve raises interest rates after its meeting later this week, Appelbaum drove into the mechanics of how such a rate hike would work in this weekend’s paper.

Cheap fuel is also hooking consumers, with oil demand growth set to hit a five-year high this year, it added.

The Wall Street Journal is reporting that “China’s government’s official purchasing managers index (out Tuesday) fell to 49.7 in August-its lowest reading in three years“.

Besides, higher supplies from the major producing areas and weak trend at overseas market weighed on crude palm oil prices.

Meanwhile, the spread between the Brent and the WTI crude contracts stood at 7.08 a barrel, compared to 6.88 by close of trade on Wednesday.

Brent and US crude both fell to six and half year lows and Carsten Fritsch, oil analyst at Commerzbank, speaking at Reuters” Global Oil Forum, said the collapse was “not about oil market fundamentals’ but about China.

Brent oil closed at a $4.45 premium to West Texas Intermediate, the U.S. benchmark.

Bahrain also declined, but it was the only market that lost below one per cent at 0.37 per cent.

Prices of crude have collapsed by close to 62 percent since the November high of close to $105 last November which is being seen as a huge negative for oil producing countries in the Middle East.

An increase in Iranian crude oil production of around 600,000 barrels per day is likely in the latter half of next year, a U.S. federal report found.

Spot prices of Western Canada Select (WCS), a marker for heavy, diluted bitumen from Alberta’s oil sands sank to a 12-year low near $20 a barrel. WTI may drop to $US32 on the persisting global surplus, Citigroup Inc. said in a report August 19.

Leading members of the Organization of Petroleum Exporting Countries are maintaining output, while Citigroup Inc. predicts crude may slide to as low as $32/bbl, a level last seen during the world financial crisis.

Behind that were signs Beijing is struggling to prevent a stall in the world’s second largest economy, and that its actions, like the devaluation of the Yuan last week, was having a negative impact throughout emerging markets and would drag in developed economies as well.

October U.S. crude was down 87 cents or 2.1% at $40.44 per barrel having at one time touched a low of 6 ½ years at $39.86 per barrel during the day. At the same time the global benchmark Brent fell 2.5% down to $45.46 per barrel.

US crude oil fell towards $40 a barrel on Thursday after overnight data surprised analysts with a jump in US oil inventories.