The FTSE, is down nearly half a percent in early trading with BP and Shell, slipping 0.7% and 1.3% respectively on brent crude weakness.
Spreadex Analyst, Connor Campbell commented “Brent Crude quickly hit a new 2017 nadir, and its worst price since November 2016, this morning, dropping another 0.2% to sit just below $45 per barrel.”
“Despite a brief bounce following yesterday’s larger than expected fall in US crude inventories the current oil glut fears aren’t receding, especially since ramped up production in places like Libya and America means OPEC’s ability to affect global output may be waning.”
The Eurozone indices were also affected with the CAC sliding by 0.4%, while the DAX, which had struck an all-time high of 21950 on Tuesday, finds itself below 12750 following another 0.2% decline.
Meanwhile, the US Dollar has been retreating against most of its major pairings. Analysts are questioning whether this is a short-term correction or broader reversal. ADS Securities Analyst, Konstantinos Anthis suggested “A broad decline for the Dollar over the past 24 hours is attracting investors’ attention this morning particularly since there was no clear catalyst behind this retreat.”
“The US currency pulled back against the Euro, the Pound and the Japanese Yen and market participants are now wondering what’s driving the Dollar lower in order to assess whether this decline will continue”
“The next moves of the dollar will depend on how fresh data comes out of the US; this week is almost empty of any important US figures so traders will look towards tomorrow’s flash PMIs for June”
Yesterday, US equity markets continued their fall from record highs, with the exception of the Tech-focused Nasdaq. Accendo Markets Analyst, Mike van Dulken noted “The Dow Jones underperformed as Energy and Industrial names weighed, while the S&P500’s Energy sector fell by over 2% in the session. The Nasdaq avoided the crude oil inspired sell-off, closing sharply higher amid a break out from a 2-week resistance pattern.”