Oil fell briefly below $30 a barrel on 12 January 2016, extending a relentless selloff that has wiped almost 20 percent off prices this year amid deepening concerns about fragile Chinese demand and the absence of output restraint.
The day’s near 4 percent drop marks a seventh day of losses for oil.
It represents an incredible 72% plunge from crude oil’s June 2014 peak of almost $108.
Traders have all but given up attempting to predict where the new-year rout will end, with momentum-driven dealing and overwhelmingly bearish sentiment engulfing the market.
Some analysts warned of $20 a barrel. Standard Chartered said fund selling may not relent until it reaches $10.
By 12 January 2016, the crash had become almost self-fulfilling, with speculators too afraid to buy for fear of being burned by another false bottom.
With prices now below break-even costs for many producers, particularly in the once-thriving U.S. shale patch, and the costly Canadian oil sands producers barely making $15 a barrel, an extended slump has caused financial pain to flare across the world, threatening corporate bankruptcies and fiscal strain.
OPEC has rejected calls by some of its members to curb output, opting instead to pump full throttle to defend market share rather than shore up prices.
Oil has tumbled more than 18 percent this year alone, the worst seven-day run since the financial crisis.
The long list of negative factors determining the oil price to drop includes the weakening economy and ailing stock market of China, the rising U.S. dollar, which makes oil more costly, the fact that OPEC is in complete disarray, while Iran is gearing up and the surprising resilience of U.S. shale drillers in the face of the price slide.
Adding to all fears, Iraq, the second-biggest OPEC producer, plans to export a record of around 3.63 million barrels per day in February, say trade sources, worsening the scenario.