LONDON (Reuters): Stocks fell around the world on Wednesday as the price of crude declined after a strike by Kuwaiti oil workers ended.
Brent and U.S. crude oil futures prices dropped as worries about oversupply in the oil market returned to the fore.
The FTSEurofirst 300 index of leading European shares responded by falling 0.3%. The MSCI All-Country World index also fell.
The MSCI World Index, which tracks stocks from developed economies, slipped 0.1% and the MSCI Emerging Market index dropped 0.7%.
Recent gains by European stocks, which reached three-month highs earlier this week, were just a temporary bounce in a longer-term decline, said Andreas Clenow, a hedge fund manager at ACIES Asset Management. The FTSEurofirst remains down around 5% so far in 2016. “We are still in a bear market,” Clenow said.
The tumbling oil price also hit commodity-linked currencies such as the Australian and Canadian dollars, which pulled back from their recent peaks.
The end of the Kuwait strike revived the bearish mood brought on by the failure of talks on output by major producers in Dohama last weekend. They could not agree to limit production and reverse a slump in prices since mid-2014.
“We were bearish before Doha. Prices had risen too far on false hopes of a deal. Now that this has been corrected, we’re more neutral in our price outlook,” said Georgi Slavov, head of research at commodities brokerage Marex Spectron.
“Generally, we think that oil prices have passed their bottom this year, and we expect a Brent price range of $45-$55 per barrel for the mid-term,” Slavov added.
Oil falls on end to Kuwaiti strike, supply outlook
LONDON (Reuters): Oil prices fell on Wednesday as investor focus returned to worries about oversupply after Kuwaiti workers ended a three-day strike that had halved the nation’s crude output.
Industry data showed U.S. crude stockpiles rose last week, reinforcing concerns about the global surplus. Brent futures LCOc1 were down 94 cents at $43.09 a barrel at 0830 GMT.
U.S. crude CLc1 was down 98 cents, or more than 2%, at $40.10, after dipping below $40.
Six supertankers have lined up at Kuwait’s crude export terminal to load oil, and the country has raised its output to 1.6 million barrels per day (bpd) from 1.1 million on Sunday. The country produced 2.8 million bpd at the end of March.
The end of the strike revived the bearish mood brought on by the failure of major producers on Sunday to agree to freeze output and help overcome a market imbalance that has caused a slump in prices since mid-2014.
“Kuwait is moving back to full production, and we expected that oil would come off more after the Doha deal fell apart, so we’re seeing the impact of that now,” said Bjarne Schieldrop, chief commodity analyst at SEB in Oslo.
Data from the American Petroleum Institute showed U.S. crude stocks rose more than anticipated last week.
Crude inventories increased by 3.1 million barrels in the week to April 15 to 539.5 million, the industry group said, compared with analysts’ expectations for a rise of 2.4 million barrels.
Investors will now look to data from the U.S. government’s Energy Information Administration for more clues on the outlook for global supplies.