Oil prices slump to a new low as a result of high oil production. OPEC, the Organization of Petroleum Exporting Counties, announced Thursday that it would maintain oil production at 30 million barrels a day despite already low prices. Crude oil fell to $66.15 a barrel following the OPEC decision.
Crude seems to have no floor right now, and we could easily see the price drop into the low $60s,” said Tony Roth, chief investment officer at Wilmington Trust in Wilmington, Delaware.
The price slump will have a favorable effect for consumers and business like airlines and shipping companies who will benefit from lower gas and oil prices. Producers and drillers, on the other hand, will have a difficult time as market values for their product falls.
There are very clear winners and losers. The Chevrons and Exxons of the world are getting hammered; then on the other side you have the shipping companies — UPS and FedEx — along with the airlines. For them, it’s a beautiful story,” said JJ Kinahan, TD Ameritrade’s chief strategist.
The slump in oil prices has also had their effect on markets here in the US and around the world. Many oil producers, like China’s CNOOC and Royal Dutch Shell in Europe, saw major dips in market value. The effect in Europe is especially concerning, as low inflation has already threatened the continent’s economic stability.
Read More – Wall Street Ends Flat, Energy Sector Sinks, Airlines Soar (Fox Business, Ryan Vlastelica)
S&P 500 Eases as Falling Oil Prices Hit Energy Stocks (Star Tribune, Matthew Craft)
Eurozone Inflation Dips Again as Energy Costs Tank (ABC News, Pan Pylas)