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Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsCrashing Crude May Blow A $1.6 Trillion Hole In The Global Oil Sector, Annually
NEW YORK (MarketWatch)Talk about an oil spill. The spectacular unhinging of crude oil prices over the past six months is weighing mightily on the U.S. stock market.
And while it may be too early to abandon all hope that the market will stage a year-end Santa rally, it appears that if Father Christmas comes, theres a good chance his sleigh will be driven by polar bears, instead of gift-laden reindeer.
Wall Streets gift: a major stock correction.
Indeed, the Dow Jones Industrial Average DJIA, -1.79% already endured a bludgeoning, registering its second-worst weekly loss in 2014, shedding 570 points, or 3.2%, on Friday. Thats just shy of the 579 points that the Dow lost during the week ending Jan. 24, earlier this year. Its also the second worst week for the S&P 500 this year SPX, -1.62% which was down about 58 points, over the past five trading days, or 2.83%, compared to a cumulative weekly loss of 61.7 points, or 3.14%, during the week concluding Oct. 10.
But all that carnage is nothing compared to what may be in store for the oil sector as crude oil tumbles to new gut-wrenching lows on an almost daily basis. On the New York Mercantile exchange light, sweet crude oil for January delivery settled at $57.81 on Friday, its lowest settlement since May 15, 2009.
Moreover, the largest energy exchange traded fund, the energy SPDR XLE, -1.86% is off by 14% over the past month and has lost a quarter of its value since mid-June.
The real damage, however, is yet to come. By some estimates the wreckage, particularly for the oil-services companies, may add up to a stunning $1.6 trillion annual loss, at oils current $57 low, predicts Eric Lascelles, RBC Global Asset Management chief economist.
Since its a zero-sum game, that translates into a big windfall for everyone else outside of oil players.
more...
http://www.marketwatch.com/story/crashing-crude-may-blow-a-16-trillion-hole-in-the-global-oil-sector-annually-2014-12-14
Fred Sanders
(23,946 posts)jberryhill
(62,444 posts)Purveyor
(29,876 posts)of this article.
Russias Unfazed by Falling Oil Prices
http://www.democraticunderground.com/1016109024
progressoid
(49,990 posts)RobertEarl
(13,685 posts)The small companies and producers will go bankrupt, and Big Oil - who has billions of extra dollars from past screwing of the people at the gas pumps - will buy up all those small broke companies for pennies on the dollar, furthering Big Oil's future grip on the market.
Saudi Arabia could care less, they have been selling oil for 30 - 40 dollars a barrel for years.
The people's only recourse is to find more alternatives and conserve more.
magical thyme
(14,881 posts)and next year prices will skyrocket.
I'm continuing with my plans to restore/increase my attic insulation. Next year I'll be looking at heat pumps. Hopefully solar before the tax bennies expire. I may not be able to get this ol' house complete off fossil fuels, but if I can notch it down a few orders of magnitude, it will still be worth it over the long haul.