Yemisi Izuora/Agency Report
Australian shares have tumbled again, led by mining and energy stocks, as the price of crude extended a decline that has hit 10 per cent in the past two days.
Brent crude oil last traded at $US32.36 on Wednesday afternoon, a drop of nearly $US4 from Monday’s high of $US36.25.
“It’s about oil today, driven by the news out of the northern hemisphere,” said Alistair McCorquodale, a private client advisor at Morgans. “We had the report from BP – that hit home.
There was the Russian interaction with OPEC and the news that (OPEC member) Nigeria is seeking funds. You’re starting to see significant difficulties as we feel the effects of the low oil prices. You’re starting to see cracks.”
The ASX200 was trading down 2.1 per cent at midday to 4889.6 while the All Ordinaries was 2 per cent lower at 4942.2.
The newsflow for oil was all bad. Nigeria, Africa’s biggest oil producer, may ask the World Bank and other international financial organisations for aid to cover budget shortfalls created by the collapse in oil prices. The government said it was looking to borrow as much as $US9 billion ($12.8 billion).
Nigeria’s statement makes it the second major oil producer after Azerbaijan to say it might need emergency financing.