LONDON: Oil suffered another dizzying plunge on Tuesday, with Brent crude sliding to a five-year low under $59 as markets were rocked by shrinking Chinese manufacturing output and turmoil in Russia.

In afternoon trade in London, benchmark contract Brent North Sea crude for January delivery slumped to $58.89. Earlier it had fallen as far as $58.50 per barrel — the lowest level since May 2009.

New York’s West Texas Intermediate (WTI) for January hit a similar nadir at $53.80 in electronic deals in European trading hours, and upon opening of trading in New York it established itself at $54.24.

The oil market has plummeted by almost 50 per cent since June, dented also by Opec’s recent decision to hold its output ceiling in an oversupplied market.

Sentiment was hit by the Russian central bank’s shock move to raise interest rates to 17pc, which has failed to arrest the slide of the rouble.

The Russian rouble crashed to new record lows Tuesday, losing some 20pc in value by the afternoon despite drastic overnight measures by the central bank to hike the key rate.

A senior central banker called the situation “critical” and pledged further actions to stabilise the ruble, which has now lost some 60pc of its value this year as it hit 80 to the dollar and 100 to the euro on the Moscow Exchange.

“The combined effects of slumping oil, the Russian Central Bank’s interest rate hike and falling output from China have all come together to deliver a triple blow to the markets,” said ETX Capital analyst Daniel Sugarman.

China’s manufacturing activity worsened in December with HSBC’s purchasing managers’ index (PMI) hitting a seven-month low at 49.5pc, below the break-even point.

Published in Dawn, December 17th, 2014