News / Asia

    Asian Markets Continue to Fall on Oil Glut Concerns

    A man walks by an electronic stock board of a securities firm in Tokyo, Jan. 18, 2016. Asian shares skidded lower Monday, following another dismal day on Wall Street, as investors looked ahead to Chinese economic growth figures.
    A man walks by an electronic stock board of a securities firm in Tokyo, Jan. 18, 2016. Asian shares skidded lower Monday, following another dismal day on Wall Street, as investors looked ahead to Chinese economic growth figures.
    VOA News

    Asia's key Hang Seng index fell 1.5 percent Monday, closing the day at its lowest point in more than three years.

    Investors in the Hong Kong market responded to oil prices dropping to their lowest since 2003 on Monday, and deep market losses in the United States on Friday.

    The price of a barrel of crude fell below $28 at one point Monday after sanctions were dropped against OPEC member Iran. Tehran can now export crude in a market already experiencing an oil glut.

    Other Asian markets also showed losses, led by Tokyo's key Nikkei index dropping 1.1 percent.

    Supply and demand

    Vandana Hari, Asia editorial director of the London-based Platts energy information company, told VOA the prospect of another 500,000 to 1 million barrels a day of supply from Iran will only add to this year’s oversupply of crude oil.

    Hari also said efforts to bring greater balance between supply and demand have been hampered by the decision of the Organization of Petroleum Exporting Countries (OPEC) to give up its traditional role of stabilizing the market. She says that has been aggravated by tensions between the oil cartel and Iran.  

    She said she expects the long-expected drop in U.S. oil production has not happened because energy producers have found new efficiencies and that has surprised the market.

    However, Hari says, as oil approaches $20 a barrel, analysts widely believe that will be an inflection point at which prices will go back up.

    Victor Beattie contributed to this report.

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    by: Marcus Aurelius II from: NJ USA
    January 18, 2016 4:57 PM
    Asian markets continue to fall not on oil glut concerns since most of those countries ordinarily benefit from low oil prices, but on the collapse of China's economy. Those who have placed their bets on China and believed the absurd nonsense put out by the Chinese Communist Party and western economists alike made the wrong choice. When you look at the real facts about China and form a coherent picture of it, it is clear that those factors which lead to the apparent rise of China are gone and what is left is a enormously indebted shell that was made to superficially resemble the US but in fact is an empty façade with nothing behind it.

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