Oil continues to break records, the wrong ones

Brent crude sank to a fresh 11-year low beneath $33 a barrel in a continuation of the oil price rout on Thursday, with concerns about the Chinese economy triggering further selling by nervous investors.

The international oil marker fell as much as 6 per cent to $32.16 after China let the renminbi depreciate further in an effort to boost its slowing economy, a move that sparked a 7 per cent slide in its stock market.

China has been the engine of demand growth for the oil market during the past decade, rising from a bit-part player to overtake the US as the largest importer of crude and refined products in the world. Beijing has also been buying millions of barrels for its strategic petroleum reserve.

Other commodities were also hit hard by the turmoil in China. Copper, which is crucial to the profitability of mining houses such as Glencore, fell $129 to $4,491 a tonne, nickel $320 to $8,360 and zinc $55.50 to $1,489.

UK mining and energy shares fell, with Anglo American extending its record low by 9 per cent, and Antofagasta, the Chilean copper miner, and BHP Billiton, the Australian diversified miner, both down 5 per cent.

On the other side of the Atlantic, US oil prices slid to $32.10 — the lowest intraday level since December 2003 — before recovering to $32.82 a barrel. Spot prices for heavier grades of crude from the Canadian tar sands have fallen to less than $20 a barrel.