HONG KONG (China): Asian energy firms were the big losers right after a plunge in oil prices, as the pound’s troubles mounted on worries about Britain’s offers leave the European Union.
Both main crude contracts sank almost 4% on Monday as traders fret over Iraq’s commitment to follow output cuts decided to much fanfare by Opec and various key producers in November.
The deal sent the cost of a barrel surging a few weeks ago towards US$60 on hopes the cuts could convey a dent right global glut which have sent prices to close 13-year lows last February.
However, Iraq\’s oil minister said exports from its southern ports while in the Gulf reached a list full of December, ultimately causing suspicion it does not adhere to the cuts, which arrived to influence on January 1.
“The Iraqi headlines have raised concerns about compliance,” John Kilduff, an accomplice at New York-based hedge fund Again Capital LLC, told Bloomberg News.
“Discovered see compliance away from Saudi Arabia, Kuwait additionally, the other Gulf states.”
While both contracts edged up slightly Tuesday, regional energy firms tracked sharp losses for their US counterparts, with Sydney-listed Woodside Petroleum and BHP Billiton each down 1%
Inpex lost 0.4% in Tokyo and PetroChina dived 2% in Hong Kong, where CNOOC was down 1.5%.
The losses also weighed on some regional stock markets. Sydney shed 0.9% and Shanghai lost 0.3% while Seoul eased 0.2%.
However, Hong Kong added 0.3%, with investors welcoming data showing prices at China’s factory gates had risen recently within their fastest pace in many more than five years.
Tokyo ended the morning flat, having swung into and out of positive territory.
On foreign currency markets the pound struggled at three-month lows against the dollar after British Pm Theresa May said along at the weekend america may have control of its borders after Brexit, suggesting she would expect to quit Europe’s single sell to do it.
“The Brexit narrative also has caused market apprehension and put into souring global risk sentiment,” said Stephen Innes, senior trader at OANDA.
That unease has filtered through which various parts from the currency market, while using the yen extending gains up against the dollar as analysts say there\’s a simple fear the greenback’s rally since Donald Trump’s election had been overdone.