NEW YORK, Jan. 7 (UPI) -- Mixed news on the economic and oil front Wednesday left markets in limbo, with key indices searching for traction after hitting historic lows.
The price for Brent, the global crude oil benchmark, recovered from a brief slump below the $50 per barrel mark to fetch around $51 for the February contract. Despite the early morning rebound, Brent prices are off about half from their June value.
Brent prices have been in a free fall for most of the week in response to commitments from Saudi Arabia to protect its economic interests with steady oil production.
Markets recoiled early Wednesday amid allegations ailing Saudi King Abdullah had died. An account on Twitter, @SaudalFaisalKSA, later discredited as a hoax, said the Saudi Royal Court had announced his death.
Saud al-Faisal @SaudalFaisalKSA 17 دقبل 17 دقيقة
Saudi Royal Court announces that H.M.King Abdullah bin Abdulaziz alSaud, has died
— Vladimir Ahmedov (@vlahmed60) January 7, 2015A November decision to keep production stable from the Organization of Petroleum Exporting Countries, tacitly led by Saudi Arabia, put oil markets in a tailspin.
Markets reacted to signals from China that it would look to strike a balance between steady economy growth and sustainability as part of what it describes as a "new normal" for one of the world's leading economies.
Chinese gross domestic product expansion of 7.3 percent year-on-year is among the fastest, but third quarter 2014 performance for the country was the weakest since 2009.
Low oil prices are forcing major energy companies to trim their spending forecasts for 2015. Swedish energy company Lundin Petroleum was the latest to cut spending, announcing plans Wednesday to drop about 30 percent from its budget this year.
The decline in oil prices is adding to fears of a slowdown in the global economy. Inflation in an already struggling eurozone turned negative in December, driven in large part by falling energy prices.
In the United States, the low price of oil was spilling over into secondary energy sectors. U.S. Steel Corp., which makes steel pipes for the oil and gas business, announced plans to close two of its plants and lay off 756 workers because of the downturn in oil prices.
The price for West Texas Intermediate, the U.S. oil benchmark index, was up modestly from the previous close to trade near the $48 per barrel mark in the early Wednesday session.
