DOW’s Slide Pulls Oil Prices into a Deeper Precipice
People investing in oil with the hopes of oil and gas doing great in 2018 received a huge shock when DOW went down an unprecedented 1,175 points. The DOW’s slide had a huge impact on the oil prices, pulling them down with it as it took an unexpected plunge to the bottom. US crude faced a huge fall of 2.8 percent and Brent saw a decrease in its price as it went down by 1.98% within a matter of hours. As expected, the impact of DOW’s slide was not limited to certain markets, but it caused a dip in oil prices worldwide.
There was a huge drop in the Canadian crude when its price per barrel came to $34.38 after a drop of 3.6 percent. The West Texas crude was no exception to the fall in oil prices when it also came down by 0.56 percent. On Friday alone, the DJIA lost 666 points. The falling continued to a point where the index had now lost 1,175 points in total. When Monday ended and trading stopped, DOW had already experienced a fall of 4.6 percent.
Such a drop in value was last seen nearly 10 years ago with the financial crisis of 2008. The White House was concerned about the price drop, but government officials have shown their faith in the fundamental pillars of the economy and, according to the White House, the overall movement of the US market is in the expected direction.
Chevron and Exxon felt the jolt of DOW’s slide the most as their stock prices came sliding down fast. Exxon Mobil, according to many news sites, was a huge loser in the event as the company experienced a drop of 12 percent in its shares. The second in the queue, right behind Exxon Mobil, was Chevron with a price drop of over 6 percent. The price drop has been associated with the jobs report, but those watching the market closely know that Chevron and Exxon were not in the best positions before the report’s effect.
Chevron’s downfall has been associated with the very small margins it is banking its back on in the international market. Hurricane Harvey had been affecting its stock’s prices in the market even before anything else.
Things are not looking very great for Exxon, but there might be some bright light at the end of the tunnel for Chevron. On Tuesday, Exxon Mobil had lost another 1.7 percent, however, Chevron started to make its way back into the market with a rise of 4 percent. Barclays has also stated that Exxon’s loss of stock prices is due to its US Shale oil investments with very thin margins.