Tuesday, November 04, 2014

Saudi Oil-Price Cut Upends Market

Move Paves Way for Further Price Declines, Adds Pressure on U.S. Energy Producers

By Nicole Friedman, Benoît Faucon and Summer Said, WSJ
Nov. 3, 2014 8:04 p.m. ET

Oil prices tumbled to their lowest point in more than two years after Saudi Arabia unexpectedly cut prices for crude sold to the U.S., likely paving the way for further declines and adding to pressure on American energy producers.

The decision by the world’s largest oil exporter sent the Dow industrials into negative territory for the day amid concerns about the pace of global growth.

The move heightened worries over the resilience of the U.S. oil industry, which has expanded rapidly in recent years. But that growth, driven largely by new production technology used to extract oil from shale-rock formations, has never been tested by a prolonged slump in prices.

While lower crude prices generally help consumers by reducing the amount they pay for gasoline, analysts said falling energy prices will squeeze profit margins at many U.S. energy companies, particularly smaller firms or those with large debt loads.

(More here.)

0 Comments:

Post a Comment

Links to this post:

Create a Link

<< Home