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Coronavirus: European markets rise as oil traders fret about storage

Edmund Heaphy
Finance and news reporter
Fears are growing that an excess in supply could overwhelm storage facilities. (Getty)

European stocks rose slightly on Tuesday as traders assessed continued panic about oil storage capacity during the coronavirus crisis, which has prompted another fall-off in crude oil prices.

June West Texas Intermediate futures (CL=F) were down 18.94% to $10.36 per barrel, as fears grew that an excess in supply could overwhelm storage facilities and force the price of oil futures into negative territory once again.

At $18.88 per barrel, Brent crude (BZ=F) was trading more than 5.5% lower on Tuesday.

After opening flat, the pan-European STOXX 600 index (^STOXX) was 0.6% in the green. London’s FTSE 100 (^FTSE) rose by around 0.4%.

Germany’s DAX (^GDAXI) climbed by around 0.5%, while France’s CAC 40 (^FCHI) was up by around 0.2%.

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The muted open in Europe followed a mixed trading session in Asia.

China’s SSE Composite Index (^SSEC) fell by almost 0.2% on Tuesday and the Hang Seng (^HSI) was up by more than 0.8% in Hong Kong at market close.

Japan’s Nikkei (^N225) closed marginally in the red, while the KOSPI Composite Index (^KOSPI) in South Korea climbed by almost 0.6%. Australia’s ASX 200 (^AXJO) fell by 0.16%.

“Asia markets underwent a rather more mixed and cautious session as further declines in oil prices weighed on sentiment,” said Michael Hewson, the chief market analyst at CMC Markets UK.

“While cautious optimism continued to prevail in equity markets, it would appear that oil markets didn’t get the memo,” said Hewson.

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“The sell-off in US crude prices wasn’t helped by the news that the US oil fund would be selling off all its June contract exposure in favour of longer-term delivery contracts in the coming days.”

Futures were pointing to a higher open for US stocks on Tuesday.

S&P 500 futures (ES=F) rose by almost 0.2%, Dow Jones Industrial Average futures (YM=F) rose by more than 0.3%, while Nasdaq futures (NQ=F) were also 0.3% in the green.