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Oil prices fall to 12-year lows amid worries over oversupply and China concerns

Oil prices have fallen 16 percent so far this year and Asian shares are near 4-year lows over concerns China's economy may be in for a tough time. Copper prices fell to a 6-year low as the week's trading began.

Oil prices hit new 12-year lows on international markets on Monday over concerns about slow demand and oversupply - from US shale oil production and a return of Iranian oil to world markets after the end of sanctions on its exports.

US crude futures have fallen

almost 16 percent this year - down to $30.88 per barrel on Monday. International benchmark Brent futures fell to $31.17 per barrel - also a 12-year low.

Copper prices have been used in the past as a gauge of strength in the global economy because of the metal's wide industrial use. The price of copper fell more than 2 percent on Monday to reach a six and a half year low of $4,381 per tonne.

Japan's Nikkei fell 1.3 percent on Tuesday after a market holiday on Monday. That represents a three month low and a fall of over 8 percent so far this year.

Since the start of the year, markets have been rocked by severe falls in

Chinese stock markets, and the value of China's currency

- despite heavy intervention by Chinese authorities.

Watching China and oil

"Investors have one eye on China, and all that's going on there, and the other eye on oil," said Erik Davidson, chief investment officer at Wells Fargo Private Bank. "Those two things are keeping investors on pins and needles right now."

Gain Capital analyst Fawad Razaqzada said he doesn't see much hope for an immediate rebound in the oil price. "At the moment not many people are expecting to see a significant rebound in oil, so prices are continuing to gush lower to multi-year lows as sentiment goes from bad to worse," he said.

International sanctions against Iran are due to be lifted once the deal over its nuclear program is implemented. This would allow Tehran to add a further million barrels of oil per day to the existing glut on world markets. The photo shows Iran's Kalntari oil dock in the Sea of Oman.

bik/jm (AP, AFP)

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