With prices now below break-even costs for many producers, particularly in the once-thriving U.S. shale patch, and the costly Canadian oil sands producers barely making $15 a barrel, an extended slump has caused financial pain to flare across the world, threatening corporate bankruptcies and fiscal strain.
As quoted from BBC The low price gave direct impact to global stock. Most of stock in many region fell on Thursday, giving up most of the previous day's gain as weak oil price fanned fear about a slow down in the global economy. With prices now below break-even cost for many producers, particularly in the once-thriving US Shale patch, and the costly Canadian oil sands producers barely making $15 a barrel, an extended slump has cause finacial pain to flare accros the world, threatening corporate bankruptccies and fiscal strain
U.S. stocks are opening 2016 on a grim note, dropping sharply after a plunge in China and declines in Europe. Overseas markets fell even more. China's main index plunged nearly 7 percent, triggering an emergency trading suspension. The drop was caused by weak Chinese manufacturing data and escalating tensions in the Middle East and European indexes fell between 2 and 3 percent as quoted from USNews.
According to Moneycontrol On Wednesday 13 January, US Stock sank, pushing the SP 500 to close below 1,900 for the first time since september as investor grew anxious about weak energy prices. All 10 S&P sectors ended in red, led by consumer discretionary shares, the health sector and technology. Stock had started the day high but sentiment turn negative when a brief rally in beaten-down oil prices stalled. Growing stockpiles of oil in the United tates stock marked fears about demand.
The Dow Jones industrial average closed down 364.81 point, or 2.21 percent to 16,151.41. The S&P lost 48.4 points, or 2.5 percent, to 1,890.28 and the Nasdaq Composite dropped 159.85 point, or 3.41 percent, to 4,526.07. The CBOE Volatility index, Wall Street's favourite gauge on uncertainty, gained 12.2 percent
Asian shares skidded on Thursday, taking their cue from steep losses on Wall Street as an overnight rot in oil price heightened worries about the global economy.
Although lower oil prices are always welcomed by consumers, the global impact of the fall in oil prices is much more difficult to interpret, since many countries depend on oil as a major revenue source and lower price hurt their economy. Lower oil price also signify a weak global economy, which could more than outweigh the benefit of lower oil price
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