HONG KONG (AFP) –
Another sell-off in energy firms dragged Asian markets lower on Wednesday, tracking hefty losses on Wall Street as oil prices tanked, while Shanghai was muted despite MSCI’s decision to include mainland-listed firms in a key index.
Crude sank more than two percent on Tuesday as traders grow increasingly worried about a global supply glut as continued production in the US and elsewhere offsets an OPEC output cut deal.
The fall also came despite a drop in US inventories.
“Oil prices have officially entered a bear market (and) plummeted two percent after reports of rising output for from Nigeria and Libya — both OPEC members exempt from the production cut deal,” said Stephen Innes, senior trader at OANDA.
The crude sell-off, which means the commodity has lost a fifth of its value from recent highs, saw energy firms drag Wall Street down with all three main indexes ending deep in the red.