From an article by CLIFFORD KRAUSS and PETER EAVISJAN published in the NY print edition of The New York Times on 6 Jan 2015 under the headline:
“Oil’s Fall Continues Into 2015, and Stock Markets Shudder”
HOUSTON — Oil prices tumbled below $50 a barrel on Monday, spooking global financial markets and signaling that the remarkable 50 percent price drop since June was continuing this year and even quickening.
The new drop in American and global benchmarks of more than 5 percent was accompanied by reports of increased Middle Eastern oil exports, continuing increases in American production and renewed worries about the declining economic fortunes of Europe.
The plunge once again sent fear through global markets.
“It is a very shaky start for the oil market,” said Tom Kloza, global head of energy analysis for Oil Price Information Service. “The norm is a lot of money comes into commodity index funds at the beginning of the year, and that can create a market rally. Today, instead of new money coming into oil, you got some more old money going out of oil.”
The drop in prices has led to a rising tide of oil company announcements in recent days of investment cuts for the coming months.
The last time oil and gasoline prices fell this low was in the wake of the 2008-9 financial collapse, when crude oil fell from well over $100 to below $40 a barrel in a matter of months. Energy analysts say the current price slump is of an entirely different nature, based primarily on a glut of oil being produced in the United States, along with increased production in Canada, Iraq and a handful of other countries.
FROM A RELATED BLOOMBERG NEWS ARTICLE 6 JAN 2015
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