Weak Chinese demand for oil, coupled with its devalued currency against the US dollar could lead industry into a deeper trough, economists say. Following an inauspicious start to 2016, oil prices continue to tumble, and currency rates coupled with global oversupply are pushing commodity prices into relatively unchartered territory. In fact, foreign exchange disparities noted by Morgan Stanley in a Jan. 11 commodities report indicated the prices could get worse before they get better. The U.S. dollar’s appreciation is largely propped up by the People’s Bank of China [PBOC] recent devaluation of the Chinese yuan (CNY). More of this could lift the U.S. dollar (USD) up by 3.2 percent, exacerbating the CNY-USD spread. “If a rapid devaluation occurs, a 15 percent CNY devaluation alone could send oil into the $20s,” Morgan Stanley analysts opined. As a commodity, oil is particularly levered to the USD. If the USD value increases […]