Oil producers all around the world are currently facing a dramatically drop of oil prices since Tuesday after the devaluation of the Yuan by the PBOC.
The price of oil fell as much as 5% on Tuesday, since China, the second bigger oil consumer, has devalued its currency. As a result of this, US crude oil has also hit contract lows, and is now trading less than $1 per barrel above its lowest trading price in 2015.
Tariq Zahir, a managing member at Tyche Capital Advisors, concludes:
“It is time to sell any and all rallies”.
As the Organisation of Petroleum Exporting Countries has projected, the crude supplies coming from countries outside of the organisation will rise by 90,000 barrels per day in 2015. This signifies that the collapse of the crude price was taking longer than first thought to hit the North America shale oil industry and other competitive sources.