A renewed sell-off in crude oil prices amid oversupply concerns effectively dented risk sentiment on Wednesday with global stocks exposed to heavy losses as oil bears pressured equity bulls. European markets were punished by the sharp decline in energy shares and the bearish contagion was swift to contaminate Wall Street which concluded mostly lower. Although Asian stocks edged cautiously higher during Thursday’s trading session, the lack of appetite for risk may limit upside gains.
Crude oil’s ongoing oversupply woes reached an ear-piercing crescendo during Tuesday’s trading session as WTI crude plunged into a bear market after growing signs of rising production across the globe. WTI Crude was already extremely sensitive and vulnerable to losses amid the bearish sentiment with reports of an unexpected supply increase by Libya sending prices below $43.