Oil sell-off pauses, markets rebound

Asian markets rebounded as investors took comfort in the slight rebound in oil prices and the pause in the big sell-off that took place on Monday when oil prices dropped nearly 7 per cent in Asia. This was in reaction to news of the breakdown of talks in Doha, Qatar between oil producing countries.

The talks in Doha over the weekend failed to end with a deal after Saudi Arabia insisted that Iran, which has refused to participate as it rebuilds exports after years of sanctions, should be part of any agreement. It was hoped that there would be a deal for a production freeze intended to strengthen prices.

Oil prices had rallied in recent weeks on speculation that a deal might be struck among large producing nations including Saudi Arabia and Russia.

Early on Tuesday, Brent crude, the international benchmark, traded at $42.65 a barrel while West Texas Intermediate, the US marker, traded at $39.63. Prices were also supported by a workers’ strike in Kuwait that has temporarily reduced output.

Commodity-linked currencies and equities followed the path set by oil prices, initially falling and then staging a recovery.

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