The oil price war that has broken out between Russia, Saudi Arabia and the US sent oil price tumbling this week. The fears of a global coronavirus pandemic has only made the collapse worse.
But these things didn't cause the crisis. It only made them worse, argues Murray Gunn, an analyst with Elliott Wave, a consultancy that specialises in how societal moods affect asset valuations.
The world was already ripe for a crunch as sentiment has been blackening over the last few years. “This is the collapse of a prolonged bull market. This is the start of something new,” says Gunn, who adds the crisis could last for months or even years. Sentiment was already bad before, but the double whammy of coronavirus and an oil price shock will only make things worse.
Ben Aris, editor-in-chief of bne IntelliNews
Murray Gunn, Head of Global Research at Elliott Wave International