Measure of oil market volatility climbs to
highest since Aug.
S&P 500 Energy Index poised for biggest
weekly loss since 2015
The last time oil had such a bad week two
years ago, the commodity was trading near a $26 bottom.
On Friday alone futures in New York lost
almost $2, settling below $60 a barrel for the first time this year as the
unraveling of global equity markets
added to concerns that a new shale boom is in the making.
American crude output is soaring so fast
that the U.S. is on the verge of elbowing Saudi Arabia and Russia aside as the
top supplier, gushing more than 10 million barrels a day. Drillers this week
added the most oil rigs since January 2017.
Crude had been on a steady rally since June
as the Organization of Petroleum Exporting Countries and Russia curtailed
output to prop up prices, while American stockpiles shrank. But with some prime
shale areas delivering profits with oil at $50 or even less, the U.S. is
producing the most crude since the 1970s.
Traders who try to divine market momentum
from technical signals were closely watching New York crude’s 50-day moving
average during the session, with West Texas Intermediate closing below the key
level. A settlement below that mark for several days in a row would be regarded
as a bearish indicator.
WTI for March delivery slid $1.95 to settle
at $59.20 a barrel on the New York Mercantile Exchange, the lowest since Dec.
22. For the week, futures declined 9.6 percent, the most since January 2016.
Brent for April settlement declined $2.02
to end the session at $62.79 on the London-based ICE Futures Europe exchange.
The global benchmark settled at a $3.80 premium to April WTI.
While the S&P 500 Index erased losses Friday, stocks are still poised for
their worst week since 2016.
One of the things about this pull-back
that we are seeing in equities, which is really tough to manage, is that there
does not appear to be any good place to hide Oil and gas companies are feeling the pain.
The S&P 500 Energy Index is on track for an 8.5 percent drop this week, the
largest on a weekly basis September 2015.
MORE WILL UPDATE SOON!!
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