NEW YORK, (Reuters) – U.S. oil prices dived again yesterday, threatening to dip below $40 a barrel for the first time since the financial crisis and notching their longest weekly losing streak since 1986, as a drop in Chinese manufacturing rattled global markets.
World stock and currency markets joined an extended rout across raw materials this week, a slump accelerated on Friday by data showing activity in China’s factory sector shrank at its fastest pace in almost 6-1/2 years in August.
With deepening gloom over demand growth from the world’s second-biggest oil user, and expectations for a significant build-up in surplus oil stocks this autumn, dealers said most oil traders were unwilling to fight the tide.
“The market is stuck in a relentless downtrend,” said Robin Bieber, a director at London brokerage PVM Oil Associates. “The trend is down – stick with it.”
U.S. October crude fell $1.02, or 2.5 percent, to $40.29 a barrel by 11:22 a.m. EDT (1522 GMT), having touched a new 6-1/2-year low of $40.11 a barrel earlier. Front-month U.S. crude has fallen 33 percent over eight consecutive weeks of losses, the longest such losing streak since 1986.
