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MTECHTIPS:-Oil futures drop to fresh 6-1/2 year low amid China turmoil

MTECHTIPS:-Oil futures drop to fresh 6-1/2 year low amid China turmoil

Crude oil futures fell to the lowest level in more than six years on Monday, as steep declines on China’s stock market rattled investors’ confidence. The Shanghai Composite tumbled nearly 9% on Monday, the biggest one-day drop since February 2007, on investor disappointment that Beijing held back from implementing fresh measures over the weekend to support stocks after markets fell 11% last week. Chinese equities have been under heavy selling pressure in recent weeks amid fears over China’s slowing economy and worries that Beijing may allow the yuan to continue to depreciate. Market players are concerned that the plunge in the stock market could spread to other parts of the Chinese economy, triggering fears that the Asian nation’s demand for oil will decline. Worries that China’s recent devaluation of the yuan will slow down the country’s import of oil also weighed. Financial markets have been roiled since China devalued the yuan on August 11, sparking a selloff in equities, commodities and emerging-market assets. The Asian nation is the world’s second largest oil consumer after the U.S. and has been the engine of strengthening demand. On the ICE Futures Exchange in London, Brent oil for October delivery hit an intraday low of $44.00 a barrel, the lowest level since March 2009, before trading at $44.25 during European morning hours, down $1.21, or 2.66%. London-traded Brent futures lost $3.30, or 7.58%, last week, the eighth straight weekly decline, as ongoing concerns over a glut in world markets continued to drive down prices
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