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Hansen: Falling crude prices spill over into other asset classes

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Both WTI and Brent crude have fallen dramatically this Monday as the oil sell-off continues. Saxo's Ole Hansen says there is no real reason for the drop, apart from continuing weak fundamentals.

Hansen explains that there has now been a spillover into other asset classes including equities and corporate debt. Banks too are looking at their loan portfolios as energy companies struggle to make a profit. Wednesday's probable Federal Reserve hike also adds pressure. 

The only positive news, says Hansen, is that speculative bets on WTI continue to rise after they hit a new record last week. When the market stabilises, he believes the price of crude could see a bounce of 25%. The question is whether it has to fall further first.