LONDON: Gulf stocks fell on Thursday and oil followed suit, capping a tumultuous week on global markets that have have been rocked by the spread of the coronavirus and the collapse of oil production cuts by the OPEC+ group.
US stocks halted trading for 15 minutes, as the benchmark S&P 500 index plunged 7 percent, triggering an automatic cutout shortly after the opening bell, for the second time this week.
Earlier, Dubai shares fell 8 percent with Abu Dhabi losing 7.4 percent and Qatar finishing 4.5 percent lower. Saudi stocks retreated by 3 percent with Saudi Aramco shares about 2.4 percent lower. All seven Gulf exchanges ended the week with heavy losses.
The stock market rout coincided with more upheaval in the oil market with Brent crude trading below $34 a barrel and West Texas Intermediate around $31 a barrel. Global markets have been in retreat this week as OPEC failed to reach consensus with non-OPEC producers led by Russia on more oil production cuts to help support prices that had already been hammered by the economic slowdown caused by the spread of the coronavirus.
Oil prices fell more than 5 percent on Thursday as an unexpected move by US President Donald Trump to restrict travel from Europe further rattled confidence.
The oil market was reacting to the impact on jet fuel demand and expectations for business activity and economic growth, said Bjoernar Tonhaugen, head of oil markets at energy consultant Rystad. “It leads to further loss of confidence in governments’ handling of the fallout and increases uncertainty about the extent of the virus impact on the overall economy, reflected in sharp falls in risk assets across the board this morning.”
The price of oil has fallen by about half from its January high.
The US Energy Information Administration and OPEC have slashed their forecasts for oil demand due to the coronavirus.