On Tuesday Brent futures crashed to $39.8 a barrel and WTI futures fell down to $36.6 a barrel - the weakest levels in seven years. Previous prices at nearly $108 a barrel in June 2014 has finally wiped out in 2015. The Dow dropped 117 points yesterday, with the energy sector its biggest drag. Oil settled at $37.65 a barrel on Monday, the lowest since February 2009.
These moves come after Friday's decision by OPEC not to cut oil output following a contentious six-hour meeting. The oil cartel essentially left production near record highs despite the oversupply problem.
"My head is spinning from the past few days of declines. Sentiment is horrible. It's very bearish," said Mike Wittner, global head of oil research at Societe Generale.
U.S. production remains near record-highs. Goldman Sachs recently predicted U.S. output will shrink by a modest 65,000 barrels per day in 2016 due to declining drilling rig counts.
Сheap oil is a huge problem for energy companies like Exxon Mobil, Halliburton and Chevron, all of which have suffered steep declines in profits and share prices.
Credit: mql5.com
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