A fall in oil prices has been caused by China’s devaluation of its yuan in an effort to boost the country’s economic growth.
Front-month Brent futures fell 10 cents at $50.31 a barrel, while the US crude slipped 25 cents to $44.71, Reuters reported.
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A drop in oil prices over the past year is primarily due to a slowdown in China’s economy, which is still expected to grow around 7% a year.
Following poor economic data, China’s central bank made a ‘one-off depreciation’ of nearly 2% in the currency.
China’s latest decision made dollar-priced commodities expensive and pushed the currency to its lowest against the dollar in almost three years.
Monex Tokyo senior strategist Masafumi Yamamoto told the news agency: "Devaluation of the yuan likely won’t end here.
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By GlobalData"Currencies like the Singapore dollar, South Korean won and Taiwan dollar which stand to compete with China, are falling and today’s move could generate headlines heralding the start of a devaluation war."
As demand growth is slowing , output from key producers such as the Organization of the Petroleum Exporting Countries (OPEC), Russia and the US has increased.
