Price of oil hits $10.86 for 1st time since 1998
ISLAMABAD: Plunging U.S. crude oil prices pulled global equity markets lower on Monday, kicking off a busy week of data and earnings that will further reveal the economic damage of the coronavirus pandemic, says a foreign news agency.
With some global storage facilities nearly at capacity, the “front-month” May benchmark U.S. crude contract CLc1 fell 40.56% to $10.86 per barrel – the lowest since 1998. Brent LCOc1 was at $26.05, down 7.23% on the day.
“For oil there is a bit of a technical story (with storage), but still, if energy consumption is down 30% and OPEC reduces supply by 10%, there is still a large gap,” said Elwin de Groot, Rabobank’s head of macro strategy.
MSCI’s gauge of stocks across the globe .MIWD00000PUS shed 0.25%, following broad declines in Asia and slight gains in Europe driven by the healthcare sector.
In midday trading on Wall Street, the Dow Jones Industrial Average .DJI fell 206.99 points, or 0.85%, to 24,035.5, the S&P 500 .SPX lost 12.43 points, or 0.43%, to 2,862.13 and the Nasdaq Composite .IXIC added 21.30 points, or 0.25%, to 8,671.44
The S&P 500 .SPX has rallied 30% from its March low, thanks in part to the extreme easing steps taken by the Federal Reserve and a $2.3 trillion stimulus package passed by Congress.
Yet analysts are likely underestimating the impact of the global economic lockdown on earnings results, noted Jonathan Golub, chief U.S. equity strategist at Credit Suisse Securities.
The United States has by far the world’s largest number of confirmed coronavirus cases, with more than 750,000 infections and over 40,500 deaths, according to a Reuters tally.
Against a basket of major currencies =USD, the dollar index =USD fell 0.046%, with the euro EUR= down 0.02% at $1.0874.
Bond markets suggested investors expect tough economic times ahead. Benchmark 10-year notes US10YT=RR last rose 7/32 in price to yield 0.6336%, from 0.656% late on Friday, compared with 1.91% at the start of the year.