Oil Extends Wall Street Slump, Gold and Metals Also Down
Crude oil extended a slump amid record US stockpiles today, helping push down equity markets as energy stocks slid, while bets the Federal Reserve will raise interest rates next week weighed on gold and industrial metals.
By Paolo Palazzi-Xirinachs
Thursday, March 9, 2017 - 00:00
The Dow Jones Industrial Average fell 17.42 points, or 0.08 percent, to 20,838.31. The S&P 500 lost 0.95 points, or 0.04 percent, to 2,362.03 and the Nasdaq Composite dropped 4.12 points, or 0.07 percent, to 5,833.43. Despite this week, the outlook for US stocks still remains bright on the eighth anniversary of the current bull market.
Today’s proximate cause of the risk-off sentiment in markets: the collapse in crude-oil prices. While there’s uncertainty surrounding how long any deal between OPEC and non-OPEC nations to limit production will hold up, three things are for sure: US shale has come back with a vengeance, inventories stateside are swelling, and speculative positioning wasn’t quite ready for a pullback.
Oil fell about 2 percent, extending the previous session's slump to prices not seen since an OPEC-led pact to cut production was agreed, as record US crude inventories fed doubts about the effectiveness of the deal to curb a global glut.
US crude prices fell through the $50 a barrel support level, with market participants unwinding some of the massive number of bullish wagers they had amassed after the deal. The losses followed Wednesday's slide of more than 5 percent, the steepest in a year, after data showed crude stocks in the United States, the world's top oil consumer, swelled by 8.2 million barrels last week to a record 528.4 million barrels.
Commodities soft and hard continue to grapple with supply gluts. For copper, which is said to serve as a pulse for the global economy, a seasonal slowdown in demand and potential for moderation in Chinese activity has capped the upside for now.
The dollar fell against a basket of major currencies as the euro gained after European Central Bank Chief Mario Draghi suggested it was less necessary to prop up the market through ultra-loose monetary policy.
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