Seeing the bigger picture: oil price slump is part of broader Asian pullback

FILE PHOTO: Ships off the southern coast of Singapore seen on March 2, 2017. REUTERS/Edgar Su

By Henning Gloystein
SINGAPORE (Reuters) - The steep plunge in crude futures in the last few weeks was triggered by a nascent glut as supply-growth started to outpace demand, but it was also part of a broader pullback from risky emerging market assets such as Asian currencies and stocks.
Those assets had done well in recent years, boosted by economic growth in nations such as China, India and Indonesia.
But bulging debt across many Asian economies, tightening U.S. fiscal policy and the Sino-U.S. trade war have driven investors to vote with their feet, pulling their money out of assets such as oil or Asian stocks and instead turning to safe-havens like the U.S. dollar.
As part of that shift, oil markets have lost a third of their value since early October .
"Anything denominated against the USD is under pressure right now," said Gregg McKenna, an independent cross-asset market analyst based in Australia.

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