Energy shares led declines on Asian stock markets Friday after oil prices fell to their lowest levels in nearly six months on oversupply concerns.
KEEPING SCORE: Hong Kong’s benchmark Hang Seng index lost 1.2 percent to 24,396.85 while the Shanghai Composite index in mainland China shed 0.7 percent to 3,104.02. Australia’s S&P/ASX 200 fell 0.7 percent to 5,835.20. Taiwan’s benchmark fell and Southeast Asian indexes were mixed. Markets in Japan and South Korea were closed for holidays.
CRUDE CONCERNS: U.S. benchmark crude futures fell under the key $45 level after tumbling nearly 5 percent during U.S. trading. Oil is being hammered by uncertainty over whether OPEC will extend an agreement to cut production and worries that renewing the deal wouldn’t be enough to counter a growing glut. Member nations of the Organization of the Petroleum Exporting Countries are due to discuss the deal later this month. Crude fell $1.36, or 3 percent, to $44.16 a barrel after falling as low as $43.76 in Asian trading, wiping out all gains since the production cut agreement in November. The contract lost $2.30, or 4.8 percent, to settle at $45.52 a barrel on Thursday. Brent crude, the standard for international oils, fell $2.75 to $47.05 a barrel in London.
QUOTEWORTHY: “The collapse in oil prices saw (benchmark West Texas Intermediate) plunge as the market continues to probe for a bottom amid oversupply concerns,” said Stephen Innes, senior trader at OANDA. He said traders saw $45 as an important level because the Saudi oil minister said earlier this week that prices would be kept in the $45-55 range. “If $45 was OPEC line in the sand, well it’s been breached so let us see how strong OPEC resolve is,” he said.
ENERGY SHARES: Oil company stocks led declines. PetroChina, China’s biggest oil producer, lost 3.2 percent and Sinopec, the country’s largest refiner, fell 2.8 percent. Australia’s Woodside Petroleum slid 3 percent.
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