A jolt lower for oil since peaking in October has helped crude futures to carve out a bearish record. That is even after U.S. benchmark oil on Thursday fell into bear-market territory, defined as a drop of at least 20% from a recent peak.
West Texas Intermediate crude for December delivery on the New York Mercantile Exchange CLZ8, -2.44% settled lower on Monday, marking its 11th consecutive decline, surpassing a 10-day skid for the contract from July 18-July 31 1984, according to Dow Jones Market Data. It’s 11th straight decline is now the longest series of losses for oil since WTI started trading in 1983, according to Dow Jones Market Data.
What’s behind the downturn?
Rising production and a softening in U.S. oil sanctions on Iran, that included waivers for big crude importers like China, which helped to contribute to a whipsaw lower for oil prices. Indeed, just five weeks ago, oil futures had put in their highest prices in years. Lingering concerns about the global economy and expectations for sluggish corporate earnings in the future also have added to the downbeat mood in the oil industry.
On Monday, President Donald Trump voiced his disapproval over a potential production cut. In a tweet Monday, he said, “Hopefully Saudi Arabia and OPEC will not be cutting oil production,” adding that “oil prices should be much lower based on supply!”
Hopefully, Saudi Arabia and OPEC will not be cutting oil production. Oil prices should be much lower based on supply!
— Donald J. Trump (@realDonaldTrump) November 12, 2018
That atmosphere has lent itself to a downdraft in stocks, with the Dow Jones Industrial Average DJIA, -2.05% the S&P 500 index SPX, -1.71% and the Nasdaq Composite Index COMP, -2.50% all trading lower Monday, and indexes in Europe, like the pan-European Stoxx Europe 600 Index SXXP, -1.01% and China’s Shanghai Composite Index SHCOMP, +1.22% also in the red.
Meanwhile, January Brent crude LCOF9, -1.77% also was in decline.
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