Brent crude oil in ‘brutal’ drop as China slows

August’s first full day of trading showed no let-up in July’s major themes — oil led commodities lower, currencies of resource-rich countries fell, Chinese stocks slid on economic concerns and European equities rose on earnings.

Greek shares slumped as a five-week market suspension ended. Brent crude dropped 3%, to $50.60, at one stage, following the biggest monthly slump in seven years, while aluminium fell to the lowest since July, 2009.

The ruble slipped to the weakest since March, alongside declines for the Canadian and Australian dollars. The Stoxx Europe 600 Index rose for a fifth day, as the Athens stock benchmark plummeted 16% and the Shanghai Composite Index added to its worst monthly drop since 2009.

Commodities dropped after an official gauge of Chinese manufacturing slid to a five-month low and Iran said it will be able to bolster crude production within a week of sanctions ending. National Bank of Greece tumbled by a 30% daily limit, as the Athens exchange reopened following a halt during the country’s economic crisis.

“It’s been quite brutal in Brent crude,” Bjarne Schieldrop, Oslo-based chief commodities analyst at SEB AB, said. “If you look at industrial metals, it’s clearly a sign of bearish China sentiment.” Canada’s dollar sank to its lowest level since 2004, on plunging oil prices.

Bloomberg