Global Weekly: What’s fuelling the oil sell-off?

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This week’s strong fall in oil prices mainly affected energy stocks. All in all, equity indices didn’t move much, while bond yields creeped higher.

In the past few days, oil prices dropped significantly as a result of Libya’s and Nigeria’s increase in production. This has raised concerns that the rebalancing of the oil market could take (much) longer than anticipated. This drop in oil prices followed last week’s tensions surrounding Qatar, which triggered market speculation that OPEC (Organization of the Petroleum Exporting Countries) would not stick to its production cut agreement. 

On top of that, financial markets are still concerned that US inventories could remain at record high levels for longer than anticipated. As a result, oil prices have moved below USD 46/bbl for Brent, and USD 43/bbl for WTI.

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