The crude oil price drops


Crude oil price drop

Concerns about mounting COVID-19 cases and falling oil prices led to a broad-based slide in Canadian and US markets on Monday, with Canada’s main stock index falling to its lowest level since May.

Craig Fehr, an Edward Jones investment analyst, is concerned that a blossoming economic recovery may not be as smooth as previously assumed. At 19,726.45, the S&P/TSX composite index was down 259.09 points.

The Dow Jones industrial average was down 725.81 points at 33,962.04 in New York. At 4,258.49, the S&P 500 index was down 68.67 points. In contrast, the Nasdaq composite was down 152.26 points at 14,274.98.

Fehr said the energy-heavy TSX was impacted even harder today by significant drops in oil prices, resulting from the OPEC plus group’s recent agreement to raise production. He added that demand for the commodity is also unknown since a spike in COVID-19 instances could result in fewer gasoline sales.

Crude oil

The September crude oil contract was down $5.21 to $66.35 per barrel, while the August natural gas contract was up 10.5 cents to $3.79 per million British thermal units.

The Canadian currency fell as well, trading at 78.38 cents US on Friday, down from 79.41 cents US the day before. The loonie collapse has caused a “significant” drop in bond yields and a dip in oil prices.

Even though North American markets had a rough day on Monday, Fehr believes the long-term picture for this year and 2022 is positive. However, people should warn that the market will continue to fluctuate in the future, similar to today’s losses. Meanwhile, the August gold contract was trading at $1,809.20 per ounce, down $5.80, September copper contract was trading at $4.20 per pound, down 12 cents.

Global markets

Since February, long-term Treasury rates plunged to their lowest level as risk-off sentiment swept across global markets, flattening the yield curve. Ten-year rates fell as low as 1.17 per cent, a drop of 12 basis points. Along with the yen and the Swiss franc, the dollar soared. Despite the traditional safety trade, gold fell. After OPEC+ agreed to increase supply until 2022, oil prices plummeted. Meanwhile, Bitcoin’s decline has brought the world’s most valuable digital currency closer to $30,000.

The reintroduction of Covid-19 has alarmed global investors, who are concerned that additional lockup restrictions will impede the economy’s recovery and put an end to an equity rally that had pushed markets to record highs. The United States, the United Kingdom, and their allies declared that the Chinese government was behind several harmful ransomware. Including the massive Microsoft Exchange compromise earlier this year. The price of West Texas Intermediate crude plummeted 7.6% to $66.34 per barrel. Gold futures declined 0.2 per cent to $1,812 an ounce.

The post The crude oil price drops appeared first on FinanceBrokerage.

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