Wednesday, 3 February 2016

Oil drags down markets but expected to rebound by end of year

Markets mostly fell on Tuesday, led by another steep fall in oil prices.

US crude oil fell 5.5 percent to take its two-day loss to 11 percent.

The S&P 500 fell 1.9 percent, the STOXX Europe 600 fell 2.1 percent and the Nikkei 225 fell 0.6 percent.

The Shanghai Composite Index, however, escaped the carnage, rising 2.3 percent after China’s central bank injected more liquidity into the financial system ahead of the week-long Lunar New Year holiday.

While oil was again a source of concern on Tuesday, its decline may be setting it up for a rebound later in the year.

A survey by Bloomberg shows that analysts are projecting oil prices will climb more than 50 percent by the end of 2016.

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