Forex Marketz Daily Forex News – Fully Markets Update
In the Asian region, during Wednesday morning, sentiment remained poor as traders watched the U.S. West Texas Intermediate (WTI) crude oil futures contract continue to fall lower.
The WTI contract has managed to claw back into the green today but remains under selling pressure.
The Asian benchmark, in Japan, the Nikkei 225 was down 1.36 percent and in Tokyo, the broader Topix index was down 0.93 percent.
In South Korea, the Kospi composite index was down 1.55 percent and the Kosdaq fell 0.95 percent. Elsewhere in the Asian and Pacific Rim, the Australian ASX 200 was down 0.85 percent as commodity exposed plays were under pressure. Especially companies with exposure to oil.
The MSCI Index, which does not include Japanese shares, was down over 0.9 percent and on the mainland in China, the indices were under pressure.
The Shanghai composite was down 0.4 percent and the Smaller Shenzhen composite fell 0.49 percent.
Asian Traders Monitor Falling US WTI Crude Prices
The June West Texas Intermediate (WTI) crude contract has inched back and recovered some of its losses. This contract was last up 11.32 percent to trade at $12.88 per barrel. During the North American trade session the WTI contract shed over 40 percent.
Overnight, towards the end of the North American trade session, the WTI contract was trading at -$2.51 per barrel. It was down to minus $40 at one point during the day.
The May WTI contract, for the first time in history, settled in the red as the contract expired on Tuesday. The demand is simply not there and traders are paying others to take oil off their hands as the global supply glut worsens.
Factory Closures Sap the Demand for Oil Products
The supply of oil is rising around the world as demand for crude and its derivatives has evaporated thanks to the Covid-19 pandemic. Global factory closures and restrictions on travel to contain the pandemic has triggered this collapse in the black gold.
This has also hit commodity currencies that have large exposure to oil.
