As oil prices tumbled to 12 year lows on Friday, Wall Street Journal spoke to Abhishek Deshpande, Natixis’ Senior Oil Analyst, on how China’s slowdown has become a systemic risk for oil.
Oil has shed about a fifth of its value since the beginning of this year because of growing concerns around the Chinese economy. As the world’s second-biggest consumer of oil, the continue turmoil in Chinese markets, combined with the expected increase in Iranian crude exports, has aroused speculations that a global glut will continue to linger.
“China has been a key pillar of demand for years and if you take that out, things aren’t looking good for crude.” says Deshpande.
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