The following is an excerpt from LEWIS KRAUSKOPF | February 2, 2016 | reuters.com |
Oil prices fell more than 3 percent on Tuesday amid worries about demand, renewing pressure on global equities and boosting buying of safe-haven U.S. government bonds.
U.S. crude prices slipped below $30 a barrel before recovering somewhat as hopes for a deal between OPEC and Russia on output cuts faded.
The prolonged crude slide was reflected in results from oil majors BP (BP.L), whose shares slumped after posting a $6.5 billion loss for 2015, and Exxon (XOM.N), which posted its smallest quarterly profit in more than a decade.
The major U.S. stock indexes all were down more than 1 percent in morning trading, led down by energy shares, while the pan-European FTSEurofirst index .FTEU3 dropped more than 2 percent.
Oil's renewed drag on equities comes as some investors recently had expressed hope that other markets were beginning to diverge from the performance of the beaten-down commodity.
"People want to see stability in that market and every time they think there’s maybe some stability, it seems to leg down," said Rick Meckler, president of LibertyView Capital Management in Jersey City, New Jersey. "For equity owners and some of the high-yield owners that are tied to energy, it is a little unnerving that it can’t really seem to find a stabilized floor."
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