Top 7 Reasons Why Oil Prices Sank

08:18 11/16/2018

Since early October 2018, markets have been clobbered. The Dow Jones Industrial Average plummeted from nearly 27,000 to less than 24,500. The tech-heavy NASDAQ slipped from 8,000 to less than 7,000. The S&P 500 tumbled from 2,900 to 2,600. Even oil prices are in the deepest slump we’ve seen in years. In fact, crude oil fell from $76.90 to $55.70. And while many are panicking, that’s the worst thing you can do. Instead, remain calm. “The thing you have to worry about when you have a precipitous drop like this is it could be signaling bad things for everybody,” said Phil Flynn, senior market analyst at the Price Futures Group., as quoted by The Washington Post. “That’s the big concern.” However, remember – markets are resilient. Also remember, this pullback in the oil market is severely overdone. Granted, there’s rampant expectations for a global oil supply glut. In fact, OPEC just raised its production in September by 100,000 barrels a day to 32.78 million barrels of oil a day – a one-year high, according to the International Energy Agency (IEA). Two, President Trump granted waivers to eight countries, allowing them to continue buying Iranian oil, despite U.S. sanctions. Three, the President is still advocating for lower oil prices. "Hopefully, Saudi Arabia and OPEC will not be cutting oil production. Oil prices should be much lower based on supply!" Trump tweeted. Four, U.S. production climbed by 400,000 barrels to a record 11.6 million barrels a day, adding to oversupply concerns. Five, ongoing trade disputes between the U.S. and China have dampened the outlook for global growth.

This article has been provided by a Chasing Markets contributor. All content submitted by this author represent their personal opinions, and should be considered as such for entertainment purpose only. All opinions expressed are those of the writer, and may not necessarily represent fact, opinions, or bias of Chasing Markets.
Most Read