Stocks all over the world took a significant blow in Wednesday trading, as oil prices dipped once more after an announcement of Saudi Arabia's oil minister suggested that output cuts in oil production would not be happening anytime soon, according to Reuters.
With Saudi's announcement, analysts expect that the next set of crude data would reveal a further increase in U.S. stockpiles, deepening the global glut of oil supply even more.
The results of Wednesday's trading were quite notable, with the Stoxx Europe going down 2.2. percent halfway through the session and the S&P 500 registering a 0.8 percent opening loss. Brent crude oil also went down 2.4 percent at $32.44 a barrel, reported The Wall Street Journal.
Paul Moran, an analyst from Aviate Global, believes that the dip in global stocks was largely affected by the oil minister's announcement.
"Oil is really the lightning rod for credit expansion in the United States. If oil goes lower, we'll see higher impairments for banks, which has a knock-on effect on the price of credit," he said.
The current year has not been kind to global shares so far, with American retail investors selling $36 billion worth of stocks during the first seven weeks of the year alone, reported The Financial Times.
Of course, with the latest development in the energy and commodities sector, there is a very good chance that global stocks would continue to be battered for some time.
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