Oil plummets to 13-month low as crude crash deepens

The crude oil crash just got worse.US oil prices plummeted nearly 7% on Tuesday to $53.43 a barrel. T...

Posted: Nov 21, 2018 2:10 AM
Updated: Nov 21, 2018 2:10 AM

The crude oil crash just got worse.

US oil prices plummeted nearly 7% on Tuesday to $53.43 a barrel. That marks the cheapest closing price since late October 2017.

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The latest deep selloff coincided with more mayhem on Wall Street. The Dow shed more than 600 points on Tuesday as fears about slowing earnings and economic growth deepen.

"In times of crises, all assets correlate," said Matt Smith, director of commodity research at ClipperData. "Crude has gotten caught up in the flight from equities."

In the span of just seven weeks, crude has gone from spiking to nosediving into a bear market. Fears of a new supply glut and weakening demand have wiped out 30% of its value since hitting a four-year high of $76 a barrel in early October.

Crude has sold off by about 7% twice in the past week. The November 13 decline of 7.1% was the worst in three years.

Beyond the stock market tumble, energy analysts saw few new reasons for the energy plunge.

"Oil traders are overwhelmed by bearish news," said Clay Seigle, managing director of oil at Genscape. "The broad selloff in equities has traders concerned about the possibility of an economic slowdown, which could reduce demand for oil products."

One new development may have also helped weigh on oil prices. President Donald Trump signaled on Tuesday he won't punish Saudi Crown Prince Mohammed bin Salman for the death of Washington Post journalist Jamal Khashoggi.

"It could very well be that the Crown Prince had knowledge of this tragic event -- maybe he did and maybe he didn't!" Trump said in a statement.

Energy traders may be interpreting the White House comments on US-Saudi ties as a sign that the kingdom won't aggressively cut oil production to support the market. Trump has repeatedly urged Saudi Arabia and OPEC not to do anything that will lift prices.

"If we broke with them I think your oil prices would go through the roof," Trump told reporters at the White House Tuesday.

He also said he was "not going to destroy the economy of our country" over the murder of Saudi journalist and Washington Post contributor Jamal Khashoggi.

OPEC is scheduled to meet next month in Vienna to weigh a potential output shift.

"You've got to think OPEC will be looking to make a sizable cut to try to reign in supplies and find a floor for prices here," said ClipperData's Smith.

Not long ago, OPEC was under pressure to ramp up output in a bid to avoid $100 oil. Traders feared a supply shortage caused by the Trump administration's sanctions on Iran, the world's fifth biggest oil producer.

However, the Trump administration took a softer approach on Iran than it initially signaled. Temporary waivers were granted to China, India and other buyers.

By that point, Saudi Arabia, Russia and the United States had already ramped up output, leaving the market with a potential glut. US production has been especially strong, driven by the shale boom in the Permian Basin of West Texas. US output alone is expected to spike by 2.1 million barrels per day in 2018.

At the same time, the global growth worries spooking Wall Street threatens to eat into demand. The International Energy Agency warned last week of "relatively weak" demand for oil in Europe and advanced Asian countries as well as a "slowdown" in India, Brazil and Argentina.

"The outlook for the global economy has deteriorated," the IEA wrote.

Mississippi Coronavirus Cases

Data is updated nightly.

Cases: 343505

Reported Deaths: 7543
CountyCasesDeaths
Hinds23932444
DeSoto23229283
Harrison20527329
Rankin15411291
Jackson15232252
Madison10959227
Lee10719179
Jones9047169
Forrest8723159
Lauderdale7884244
Lowndes7054151
Lamar702989
Lafayette6548124
Washington5595139
Pearl River5196152
Bolivar4954134
Oktibbeha494398
Panola4771112
Warren4728128
Marshall4701106
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Union433279
Monroe4330137
Neshoba4281181
Hancock428088
Lincoln4176116
Pike3667113
Leflore3627125
Tate353388
Alcorn350974
Sunflower347694
Scott341176
Adams340988
Yazoo339376
Copiah324968
Simpson322891
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Tippah306568
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Marion284181
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Holmes200174
Clay197654
Clarke186880
Tallahatchie183742
Calhoun181332
Smith179235
Yalobusha171540
Walthall145748
Lawrence142826
Greene140134
Amite137543
Noxubee135235
Perry133538
Montgomery133044
Carroll126431
Webster121232
Jefferson Davis116734
Tunica114227
Benton106725
Claiborne105331
Kemper102429
Humphreys100133
Franklin87923
Quitman84719
Choctaw82619
Wilkinson78032
Jefferson71328
Sharkey51618
Issaquena1736
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Alabama Coronavirus Cases

Cases: 587405

Reported Deaths: 11536
CountyCasesDeaths
Jefferson853851591
Mobile48932864
Madison37517533
Shelby27280257
Tuscaloosa27171465
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Elmore10915219
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Limestone10725158
Cullman10546205
Lauderdale10255254
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Talladega8949188
Walker7793288
Autauga7563114
Jackson7400117
Blount7362139
Colbert6703142
Coffee6365132
Dale5650117
Russell480243
Chilton4771117
Covington4749125
Franklin458181
Tallapoosa4519156
Escambia441383
Chambers3949125
Dallas3743163
Clarke371263
Marion3463107
Pike332579
Lawrence3263100
Winston298773
Bibb290465
Geneva283983
Marengo262467
Barbour250961
Pickens245562
Butler240872
Hale235578
Fayette227065
Henry213945
Monroe202141
Randolph201144
Cherokee199248
Washington185239
Macon170552
Crenshaw168358
Clay166259
Cleburne161345
Lamar151038
Lowndes145455
Wilcox132331
Bullock126542
Conecuh121332
Coosa118329
Perry110528
Sumter110333
Greene99137
Choctaw64425
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The heat wave that controlled our area over the past several days is now behind us. The forecast for the next week looks a bit cooler & less humid.
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