by Ambrose Evans-Pritchard, The Telegraph:
Oil prices have tumbled to a three-month low as surging supply once again exposes the chronic global glut and threatens to perpetuate the energy slump for another year.
US crude contracts crashed through key technical barriers to $42.40 on Tuesday before recovering slightly in late trading on profit-taking. They have fallen by 9pc over the last four sessions.
Speculators have given it an extra push. Data from the Commodity Futures Trading Commission in the US shows that 52 hedge funds have taken out large short positions, betting that the summer sell-off still has a further leg to run.
Prices are unlikely to re-test the February lows of $26 when asset prices were tumbling across the world and markets were in a full-blown ‘China panic’, pricing in a global recession that never happened.
The latest oil tremors reveal little about the underlying health of the global economy, which has so far shrugged off Brexit fears and may be accelerating as central banks and governments in Asia, Europe, and North America step up precautionary stimulus.
Please follow SGT Report on Twitter & help share the message.