Another 6.2% drop in the Shanghai composite helped drive oil and industrial metals to a six-year low, and only seemed to slow after China pumped 120 billion yuan worth of seven-day reverse repurchase agreements, or reverse repos, which are a short-term loans to commercial lenders in the money market.
Since July, every time crude oil gets a bid there is some news to squash the rally. This time the People's Bank of China, in a surprise move, devalued its currency causing its biggest one day sell-off in almost 20 years.
Many oil companies had trimmed their budgets heading into 2015 to deal with lower oil prices. But the rebound in April and May to $60 per barrel from the mid-$40s suggested that the severe drop was merely temporary.
Crude oil prices are still under pressure after a volatile Chinese stock market trade and a big miss by BP. BP reported a loss of $5.8 billion dollars in the second quarter as oil prices plummeted and lost revenue.