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Tue 21 Apr 2020 11:45 AM

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Gulf stock markets sink following oil's trade below zero

On Monday, West Texas Intermediate prices plunged below zero to a place where traders were willing to pay to get somebody to take crude off their hand

Gulf stock markets sink following oil's trade below zero

Equity markets in the Gulf retreated on Tuesday after oil prices plunged below zero for the first time in history amid rapidly filling American storage tanks.

Abu Dhabi’s main gauge took the lead, falling as much as 3.1%. The DFM General Index in Dubai, among the world’s worst equity index performers this year, dropped 2.8%. Kuwait was down 2% at open before paring some of the losses.

“What happened yesterday was for sure a first,” said Marie Salem, head of institutions at Dubai-based Daman Securities. “It looks like the whole story has been contained and now that people understand why things happened the way they did they are being cautious with their trading.”

On Monday, West Texas Intermediate prices plunged below zero to a place where traders were willing to pay to get somebody to take crude off their hands.

US President Donald Trump said he wanted to add as much as 75 million barrels of oil to the US’s Strategic Petroleum Reserve, taking advantage of record low prices for crude, and that he’ll consider blocking imports of crude from Saudi Arabia.

“Locally we are not seeing a huge dip but things could be dramatic after the Saudi open,” said Salem.

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