On December 28, WTI and Brent crude oil prices fell more than 3%, as the world fourth largest crude oil buyer, Japan, reported that its crude oil consumption is at a 46-year low. This is despite the fact that many OPEC members, including the Saudis, are feeling the pain of markedly soft crude prices; many are now grappling with large funding gaps in their budgets.

United States crude for February delivery was 19 cents higher at $36.16 a barrel at 0124 GMT (2024 ET), after slipping 79 cents in the previous session. The bank cut its forecast for global economic expansion in 2016 by 0.4 percentage point to 2.9 per cent, though that is still faster than 2015’s sluggish 2.4 per cent.

Oil prices continue their volatility soaring up one day and down the next, on news and rumors, headlines and gossip.

The prices represent a 15 cent per barrel premium to the Argus Sour Crude Index (ASCI), which tracks the price movements of medium sour crude delivered at the US Gulf Coast of Mexico hub – the benchmark for the region, preferred by Aramco. But with the invention of new techniques like hydraulic fracturing and horizontal drilling, United States shale producers ramped up oil production relentlessly.

On Sunday, Saudi Arabia broke off diplomatic ties with Iran after a row over the Saudi execution of a prominent Shia Muslim cleric.

Shipments from Iraq’s north by the Kurdistan Regional Government via Ceyhan in Turkey have edged lower, while those by Iraq’s State Oil Marketing Organisation have remained at zero for a third month, the survey found.

In London, on Thursday afternoon, Brent crude was down 2.6% at US$33.35 while West Texas Intermediary futures are 2.8% lower at slightly more than US$33 per barrel.

The Organization of the Petroleum Exporting Countries is still pumping close to record amounts as Saudi Arabia and other big producers focus on market share, weighing on any recovery in oil prices from near 11-year lows.

In the past, turmoil in the Middle East has been associated with higher prices for oil, and, consequently, higher prices at the pump for drivers. China is the world’s second biggest economy and top energy consuming nation.

To make matters worse, China was forced to take emergency measures on Monday in order to prevent its stock market from collapsing during the first day of trading in 2016. “The decision on the amount of exports highly depends on the future condition of the market”, said Mohsen Qamsari, director general for worldwide affairs of the National Iranian Oil Company, Reuters reported.