Oil Companies Under Pressure on Lower Asian Markets

Oil companies were under pressure on Asian stock markets on Wednesday. Investors processed the sharp drop in oil prices. Markets were gripped by fears of a global economic recession.

When the economy shrinks, there is also less demand for oil. As a result, oil prices fell around 9 percent on Tuesday.

The leading Nikkei in Tokyo was down 1.1 percent an hour before the closing bell. The Japanese oil companies Inpex and Japan Petroleum Exploration plunged around 9 percent. Oil prices recovered somewhat during the Asian trading session on Wednesday. The price of a barrel of US oil rose 0.5 percent to $100.02 and Brent oil cost 1 percent more at $103.84 a barrel.

Technology companies kept losses limited thanks to a recovery in the US tech sector. Japanese tech group Sony fell 0.9 percent and tech investor SoftBank remained virtually flat. Pharmaceutical Eisai added 7.5 percent. The company’s experimental Alzheimer’s drug lecanemab is receiving preferential treatment from the US regulator, the FDA.

Chinese stocks plunged on concerns about a resurgence of the coronavirus. In the important business and port city of Shanghai, which was in a long lockdown earlier this year, the population in nine districts is again being tested massively for the virus. The main index in Shanghai was down 1.3 percent in the meantime and the Hang Seng index in Hong Kong fell 1.4 percent. Chinese oil group CNOOC lost 5.5 percent.

Oil companies in Australia also showed significant losses. Woodside lost more than 6 percent. The All Ordinaries in Sydney lost 0.4 percent as a result. The Kospi in Seoul fell 1.3 percent.