BREAKING: Oil prices plummet below $40/barrel coinciding with global stock market “bloodbath”
It’s been a dark day for oil. For the first time in more than six years, oil prices have plummeted below $40 a barrel. The incident coincides with the stock market bloodbath in the United States, China and Europe.
A move in the price of oil was original due to supply and demand in the past. Nevertheless, the recent plunge has been a consequence of what appears to be a global recession.(1)
Prices fell a whopping 35 percent since they peaked in June. Producers have been surpassing demand even as an oversupply caused prices to fall. It’s possible that the U.S. benchmark West Texas Intermediate could drop $32 on the persisting global surplus, according to a recent report provided by the Citigroup Inc. China’s growing economy may also reduce demand in the future. Brent crude fell to a six-year low as well.(2)
“It’s clear that the major producers, the Saudis, Russians, the U.S. and others, are battling for market share,” John Kilduff, a partner at Again Capital LLC, told reporters at Bloomberg Business.(2)
Furthermore, the Dow Jones Industrial Average closed at session lows, down 531 points. All blue chips are on the decline. This is the first time the index closed more than 500 points off since early August in 2011. Since then, the index has had four brushes with closing losses of more than 400 points.(3)
