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MTECHTIPS:-U.S. crude falls 5%, as China panic spills over into global markets

MTECHTIPS:-U.S. crude falls 5%, as China panic spills over into global markets

U.S. crude plunged under $38 on Monday, as weak demand in China reverberated throughout energy markets worldwide pushing future prices to fresh lows previously not experienced since the height of the Financial Crisis. On the New York Mercantile Exchange, WTI crude for October delivery traded in a broad range between $37.78 and $40.48 a barrel before settling at $38.16, down 2.31 or 5.72% on the session. Texas Long Sweet futures remain down by more than 20% over the last month of trading, amid a glut of oversupply on global markets. On Monday, WTI crude future contracts for the month of October fell to their lowest level on record. On the Intercontinental Exchange (ICE), brent crude for October delivery wavered between $42.53 and $45.47 a barrel before closing at $42.62, down 2.85 or 6.24% on the day. The spread between the international and U.S. benchmark for crude stood at $4.46, below Friday’s level of $5.01 at the close. On Monday, a lack of activity from the People’s Bank of China spooked equity markets worldwide as the fallout continued from the release of disappointing manufacturing data late last week. Chinese index futures fell by their limit of 10%, providing strong indications that the downturn will continue. Last Friday’s weak manufacturing reading, its lowest in six years, underscores persistent sluggishness in the world’s second-largest economy. Although Chinese GDP grew by 7% over the first half of 2015, many analysts believe China’s economy is decelerating and could suffer its slowest full-year growth in a quarter century.
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