On the first trading day of the new year, experts logged a short-lived rise of oil prices. The upward movement was boosted by a flare-up of the conflict between Saudi Arabia and Iran. However, several days later, on the London Stock Exchange, oil prices showed a significant decline. Brent crude dropped to $33.08 a barrel form $35 a barrel. It is noteworthy that benchmark Brent crude last touched the level below $34 in April 2004. The record slump has already provoked concerns among the world’s largest oil producers.
At the same time, analysts suppose that the current situation is closely connected with problems on the Chinese stock market, which survived the shortest trading day in China's 25-year stock-market history. The day’s trading was halted twice as shares showed an unexpected plunge. In the first 13 minutes of trading, the Shanghai Composite index lost 5%. On resumption of trading it fell further by 6.9%, triggering the day’s halt.
Since China is the world’s largest purchaser of hydrocarbon, any trouble on its stock market has an immediate effect on commodities’ prices, including oil.
Apart from China, low oil prices affect Russia as well. Thus, the country's GDP can lose 2%-3% in 2016 due to oil slump.
