Following last Thursday’s announcement by OPEC that the cartel would maintain its present oil production levels, prices of West Texas Intermediate (WTI) crude closed at $66.15 per barrel on Friday. In early trading Monday, the U.S. benchmark hit a low of $63.72 per barrel.  But as trading continued, WTI climbed back to $67.65 and held in the $67.50 range in subsequent morning trading.

Brent crude fell to a low of $70.15 on Friday, slipping to $67.59 then recovering to $71.51 in early trading on Monday. The European benchmark was trading arou...

Analyst Commentary

Raymond James:
“We mostly had expected in advance that Friday would be a rough day for energy, but we didn't think it would be THIS bad. A particularly steep plunge in oil prices in response to OPEC's (rather unsurprising) decision, combined with lots of U.S. investors out of the office, led to a near-total absence of buyers stepping in. The result: one of the roughest one-day selloffs in energy stocks that anyone has ever seen (and yes, that includes the financial crisis).”

“Risk trading lower while crude mounts reversal from overnight lows. S&P 500 futures are trading down 10 points or 0.5%, pulled lower by weak international equity trading overnight, driven, in part, by soft European PMI data. WTI has rebounded from overnight low at $63.72/bbl to now trade up 0.3% at $66.38/bbl while Brent has experienced a similar intraday rebound, moving from a nadir at $67.53/bbl overnight to rally back to near unchanged at $70.00/bbl. U.S. Treasuries are trading firmly with the 10-year rate now at 2.16%, near October’s lows. Perhaps the most notable macro action overnight comes from the Russian ruble, which has weakened 4.6% today against the U.S. dollar, trading 51.74 last, underscoring the increasingly difficult macro- economic outlook for the country amid crude’s malaise.”  

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