Oil prices have fallen following volatility in the Chinese market that dimmed hopes of a revival in demand during 2016.

Brent crude futures edged down by 47 cents and traded at $33.08 a barrel, while the US West Texas Intermediate (WTI) crude slipped 52 cents at $32.64 per barrel, Reuters reported.

Speculators increased their net-short positions in the week up to last Tuesday, sending a message that they are not expecting an increase in prices anytime soon.

"The slowdown in China’s growth witnessed a slide in the yuan, resulting in two emergency suspensions in stock trading."

The slowdown in China’s growth witnessed a slide in the yuan, resulting in two emergency suspensions in stock trading last week.

Blue-chip stocks in China declined by another 5% on Monday and interest rates for the currency outside the country increased to nearly 40% overnight.

Prices were also under pressure due to growing tension in Middle East, fading hopes of an agreement to curb oil production to arrest the slide in prices.

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Prices of the OPEC’s 13 crudes dropped to $28.46 on Friday, compared with $27.85 the previous day.

The news agency quoted Goldman Sachs analysts saying that sustained lower prices were required in the first quarter of 2016 ‘so producers will move budgets down to reflect $40 a barrel oil for 2016’.

The downturn started in mid-2014 as there was a lack in demand, despite producing high levels of crude every day and leading to a 70% fall in oil prices since then.