Asian Markets Slump on another Trading Day

Oil resumed its slide in Asia Thursday, reversing earlier gains as the supply glut and weak demand that sent prices to more than 12-year lows showed no sign of letting up.

The commodity has taken a hammering so far in 2016, with both main contracts already down about 25 percent.

Asian markets swung wildly but ended lower, continuing their recent slide over concerns about plummeting oil prices and a slowing global economy.

Tokyo closed down nearly 2.5 percent, erasing gains made earlier in the day. Shanghai dropped over 3 percent. Hong Kong ended down nearly 2 percent.

Experts blame the sell-off on investor pessimism over plunging oil prices, China's economic slowdown, and a gloomy outlook for the overall global economy this year.

Crude oil prices, which have been falling since 2014, rose slightly in Asia Thursday. But concerns remain about an oversupply.

The price for U.S. crude oil this week fell to its lowest mark in 12 years, which hurt the stock prices of energy companies that are important parts of some stock indexes.

On Wednesday, US benchmark West Texas Intermediate (WTI) fell below $27 a barrel for the first time since May 2003, days after Brent touched below $28.

Bargain-hunting provided only momentary support earlier Thursday.

By 0630 GMT, WTI for March delivery, a new contract, was down 15 cents, or 0.53 percent, at $28.20 a barrel and Brent dropped 11 cents, or 0.39 percent, to $27.77.

WTI’s February contract sank to as low as $26.19 on its last day of trading in New York on Wednesday before closing at $26.55, the lowest level since May 2003.

Expectations that the US Energy Information Administration will report another increase in the country’s commercial crude stockpiles weighed down on sentiment, analysts said.

Wednesday also saw a wild day of trading on Wall Street, as major indexes fell more than three percent at one point, before recovering significantly by the close. At the end of trading, the S&P 500 was off 1.2 percent, while the Dow fell about 1.6 percent.

Global stocks declined sharply Wednesday after another drop in oil prices prompted sell-offs from Asia to New York. The Dow Jones Industrial index plunged more than 500 points at one point before cutting its losses in half as U.S. markets closed.