Editorial: Bellwethers & Barrel Bottoms
In the aftermath of fears over a weakening Chinese economy, continual malaise in Greece and the unfettered production of a rampant OPEC, Brent crude dropped by some 2.2 percent in its biggest monthly dive since 2008.
Sitting just atop the $50 per barrel mark, the days where $70 oil seemed the blackest nightmare look evermore more halcyon. In Tehran, Iran's oil minister, Bijan Namdar Zanganeh, further spooked the commodity markets by assuring that his nation would be ready to boost oil production a mere seven days after the lifting of sanctions that have burdened the Islamic Republic since 2009.
Sources in the People's Republic have pointed to the world's largest manufacturing sector slumping to five month production lows on lessening demand. Having suffered a stock market rout that amounted to a $3.5 trillion razing of equities in July, China is wobbling at precisely the wrong time for an already quavering global economy.
Having risen to the top of the pile as the world's biggest crude oil importer in May 2015, Chinese demand is more of a bellwether than ever before as to the direction of oil prices. Should the bursting of the stock bubble and an accelerating slide into recessionary numbers follow suit, the last quarter of 2015 may be portentous of great change in the year to come.
Given the connivance, whether sought or unsought, of current geopolitical factors, could 2016 be the year that the bottom really falls out of the barrel?...
Tim Haðdar is the Editor In Chief at Oil & Gas IQ. Reach Him At Twitter Or OGIQ
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