Abu Dhabi: Oil prices are unlikely to bounce back until second quarter of next year, analysts said as the prices dropped to six year low on Monday due to concern over the growth of the Chinese economy.

Brent, the global benchmark, dropped 3.83 per cent to a low of $43.72 (Dh160.5) a barrel in early trading, the lowest since March 2009. US West Texas Intermediate fell 3.63 per cent to $38.98 a barrel, hitting a February 2009 low at 4:11 pm local time.

Richard Mallinson, an oil analyst from Energy Aspects told Gulf News over phone that sentiment remains negative and supply response is not yet visible.

“We are expecting oil prices to bounce back to $70 in the second half of next year. Sentiment remains negative at the moment.”

He said a number of projects have been either cancelled or suspended due to low oil prices. “There has been steep cut in capital expenditure by oil companies.”

Daniel Ang, an Investment Analyst from Phillip Futures said they do not have much hope for prices to stay afloat.

“We would definitely be seeing both WTI and Brent test current supports of $40 and $45 this week and would not be surprised even if it does break.”

Ole Sloth Hansen, Head of Commodity Strategy, Saxo Bank, said the current rout in commodity markets is primarily being driven by the emergence of an unbalanced market.

“Fears about weaker global growth, especially in China, have hit the market at a time where supplies of key commodities from oil and copper to iron ore and corn have been rising. Mining and oil companies have all been expecting a continued strong rise in demand from emerging economies.”

“With the biggest of these, China, now increasingly hitting the breaks and indicating it would like to see its currency lower, this is thereby raising the cost of imports commodities, not least oil and industrial metals which have been feeling the brunt of this change.”

Analysts do not expect significant rally in commodity prices.

“Global growth is weak and is unlikely to improve particularly soon in the absence of a major wave of monetary easing across the world,” Gary Dugan, Chief Investment Officer at National Bank of Abu Dhabi said.