The Indian basket of crude oils dived sharply to the $30 a barrel mark as sweet grade UK Brent prices fell on Thursday's trade to levels last seen in 2004, pulled down this time by a falling Chinese currency and a second emergency halt in China's stock trading this week that spooked Asian markets.
The Indian basket, composed of 73 percent sour grade Dubai and Oman crudes and the rest by Brent, closed at $31.33 per barrel of 159 litres on Wednesday, falling from $32.51 on the previous trading day. Its previous lower came in February 2003, when the price was $31.26 a barrel, after having fallen to $29.59 in January.
Marking a a 13-year low, the price of the Organisation of Petroleum Exporting Countries (OPEC) basket of twelve crudes stood at $29.71 a barrel on Wednesday, compared to $31.21 the previous day, the organisation's secretariat said.
US crude output increased unexpectedly last week to 9.219 million barrels a day according to the US Energy Information Agency. Adding to investors' worries was the lack of signs that US shale oil producers would start to cut production in face of the plunging prices.
The West Texas Intermediate for February delivery moved down $2 to settle at $33.97 a barrel on the New York Mercantile Exchange, the lowest close since December 2008.
Brent crude for February delivery decreased $2.19 to close at $34.23 a barrel on the London ICE Futures Exchange, the lowest close since June 2004.
China further depreciated the yuan on Thursday, leading to regional currencies and stock markets tumbling as investors feared China's moves could trigger competitive currency devaluations from trading partners.
The benchmark Shanghai Composite Index declined by 7.32 percent, which led to a halt in trading, as the circuit breaker mechanism was triggered.
Commodity prices, too, plunged as the economy of the world's largest consumer struggled.
China's service activity grew at a slower pace in December, fuelling worries about a slowdown in the world's second biggest oil consuming economy.
Meanwhile, Prime Minister Narendra Modi met global oil and gas experts here to discuss ways of boosting investments in the exploration and skill development at a time of low oil prices.
Among the foreign invitees to the meeting were British oil major BP's chief executive Bob Dudley, International Energy Agency (IEA) executive director Fatih Birol, and Royal Dutch Shell's director (Projects) Harry Brekelmans.
The discussions focused, among other things, on subjects such as increasing the share of gas in India's energy mix, fresh investment in oil and gas exploration in India, regulatory frameworks and international acquisition of oil and gas assets, said the Prime Minister's Office.
Updated Date: Jan 07, 2016 19:21 PM