LONDON: 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 LCOc1 CLc1 dropped as worries about oversupply in the oil market returned to the fore [O/R].
The FTSEurofirst 300 index .FTEU3 of leading European shares responded by falling 0.3 percent. The MSCI All-Country World index .MIWD00000PUS also fell.
The MSCI World Index .MIWO00000PUS, which tracks stocks from developed economies, slipped 0.1 percent and the MSCI Emerging Market index .MSCIEF dropped 0.7 percent.
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 percent 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. [FRX/]
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.