Daily Times

Asian energy firms took another battering on Wednesday after oil prices suffered their worst day in three years, while most of the region’s major equity markets fell into negative territory.

The pound enjoyed some support after Britain and the European Union said they had reached a draft Brexit deal, though observers were cautious as it faces a number of hurdles before being given the green light.

Both main crude contracts plunged Tuesday — Brent lost 6.6 percent and WTI 7.1 percent — on oversupply fears just as demand falters in the face of the China-US trade war and easing economic growth.

With prices now down more than a fifth from their four-year highs seen in early October, oil kingpin Saudi Arabia this week said it will cut output. The announcement fuelled an initial surge in the crude market before a Donald Trump tweet calling for it to keep prices low sent the commodity plunging.

The selling continued on Tuesday and then Wednesday in Asia after OPEC trimmed its outlook for demand this year.

And energy firms were caught in the crossfire.

Hong Kong-listed CNOOC dived five percent while Sinopec and PetroChina each lost around 2.5 percent. In Tokyo, Inpex was 1.9 percent down and Australia’s Woodside Petroleum sank 2.5 percent.

“Oil prices remain the hottest topic in capital markets if not in the world after extending their slide to 12 days and suffering one of the more precipitous falls in years,” said Stephen Innes, head of Asia-Pacific trade at OANDA.

“It’s all about the toxic combination of weakening global demand and oversupply that has sent prices tumbling.”

And Rakuten Securities commodity analyst Satoru Yoshida tipped Trump’s pressure to keep OPEC from making deep cuts.

Published in Daily Times, November 15^th 2018.