Investors have gone from contemplating the prospect of oil at US$100 to sub-$50 in less than two months
Investors have gone from contemplating the prospect of oil at US$100 to sub-US$50 in less than two months. No wonder global markets are playing catch-up.
From stocks and bonds to currencies, assets worldwide are gripped by a crude awakening. Monday saw oil’s largest one-day drop in three years, securing its longest losing streak on record.
Early trading jitters on Wednesday suggested the sell-off may not be over, though West Texas Intermediate later climbed after OPEC President Suhail Al Mazrouei said the group and its allies would do what is needed to balance the market.
The Stoxx Europe 600 Index dropped on Wednesday, with oil and gas companies among the big losers. There could be more pain in store. The performance of energy shares relative to the broader index has yet to hit year-to-date lows despite elevated price swings in the oil-market complex.
In the U.S., energy stocks were the biggest drag on the S&P 500 Index on Tuesday as the benchmark gauge reversed a gain of more than 1 per cent to finish in the red. The jump in volatility of the oil price will feed into already bruised U.S. stocks, according to Macro Risk Advisors.