Historic crash at the start of the week: For the first time in its history, the US oil price plummets. The massive daily loss of more than 200 percent scares investors on Wall Street. The result: losing other titles.
A massive drop in the US oil price, WTI, caused prices on Wall Street to fall at the beginning of the week. This slid into negative territory for the first time and marked a record low. The global slump in demand has ensured that the stocks are so full that space for new oil deliveries is becoming scarce.
There is hardly any storage space left for the oil flood on the market, so storing the oil that is due for delivery in May will be expensive. This led to massive sales of the May contract. There were also concerns about the recent positive data on the spread of the coronavirus. Here, investor sentiment fluctuated between hopes that the economy would start up again quickly and concerns that this could come too soon and trigger another wave of infections.
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Disastrous trade data from Japan also caused disillusionment. The Chinese central bank cut its key lending rates for the second time this year, but economists fear that the Chinese economy may take longer than expected to recover from the aftermath of the pandemic.
Of the Dow Jones index lost 2.4 percent to 23,650 points. Of the S&P 500 closed 1.8 percent lower at 2,823 points. Of the Nasdaq composite decreased by 1.0 percent to 8,561 points.
Saudis apparently want to quickly reduce output
For the WTI oil price there was no stopping at the beginning of the week. The May contract for the US variety, which was the market leader until Tuesday, plummeted by 231.4 percent to minus USD 24.00 per barrel. The daily low was minus $ 40.32. US oil for delivery in June fell 15.5 percent to $ 21.15. European oil of the variety Brent was for $ 26.16 a barrel – a 6.8 percent discount.
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“Not only has demand stalled, the impact of OPEC + funding cuts will not take effect in time for the current delivery,” said Phil Flynn, market analyst at Price Futures Group. The most important oil producing countries had recently agreed on a reduction in the production volume in order to bring the price back up. However, this remained largely ineffective. After the oil price crash, circles said that Saudi Arabia wanted to cut daily production as quickly as possible and not, as previously planned, in May.
Of the dollar rose slightly in the meantime and thus benefited from its status as a safe haven. In the course of this, however, he then gave up all of the profits again. Of the Euro was at $ 1.0859 in late US trade after a daily low of $ 1.0840.
Netflix wins exit restrictions
Of the Gold price increased. The troy ounce rose 0.7 percent to $ 1,695. Falling prices for industrial raw materials indicated a sharp recession. Gold is therefore still sought after as a crisis currency, it was said on the gold market.
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The oil sector in the S&P 500 lost 3.3 percent with the turmoil in the oil market and was a day loser. The shares of Occidental petroleum fell 7.6 percent, Exxon Mobil lost 4.7 percent and Chevron 4.1 percent. The titles of Halliburton won 0.7 percent after initial levies. This is supported by figures for the first quarter, which were above market expectations.
For the Netflix share it went up another 3.4 percent. The company is considered to benefit from the global exit restrictions. With this in mind, CFRA analysts see an opportunity for a positive surprise in the first quarter regarding subscriber growth. The figures will be published on Tuesday after the end of trading. Also remained in demand Pharmaceuticals with the ongoing search for a vaccine against the coronavirus. The shares of Novavax rose by 24.7 percent.
DuPont rose by 3.5 percent against the market trend. The company is securing liquidity by expanding the credit line and shifting spending. The cashed annual forecast did not have a negative impact.
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