Oil Tumbles to 5-Year Low; U.S. Stocks Decline as Energy Shares Plummet With Crude

[Purveyor]

By Moming Zhou Dec 8, 2014 2:12 PM ET

Brent crude and West Texas Intermediate slumped to five-year lows amid concern that hedge funds and other money managers bet too much on rising prices.

Futures dropped as much as 4.6 percent in London and 4.2 percent in New York. Net-long positions on Brent rose to the highest in four months in the week to Dec. 2, according to data from the ICE Futures Europe exchange, while bullish bets on WTI climbed the most in 20 months. Brent declined 9.9 percent in the period and WTI slumped 9.7 percent.

“People might consider it a buying opportunity but we still have an over-supplied market,” said Tom Finlon, Jupiter, Florida-based director of Energy Analytics Group LLC. “New lows will be tested. We are in for a volatile market. You have to expect very sharp swings.”

Both Brent and WTI tumbled 18 percent in November as the Organization of Petroleum Exporting Countries decided to maintain its 30 million-barrel-a-day output target. Crude has traded in a bear market since October amid the fastest pace of U.S. production in three decades, rising output from OPEC and signs of weakening global demand. Banks including Morgan Stanley, BNP Paribas SA and Barclays Plc have cut price forecasts.

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http://www.bloomberg.com/news/2014-12-08/oil-at-5-year-low-amid-concern-funds-may-resume-selling.html

U.S. Stocks Decline as Energy Shares Plummet With Crude
By Jeremy Herron and Oliver Renick Dec 8, 2014 2:09 PM ET

U.S. stocks fell from records amid continued selling in energy producers as crude sank to a five-year low. European equities sank while Treasuries advanced.

The Standard & Poor’s 500 Index lost 1 percent at 2:05 p.m. in New York, after rallying for seven straight weeks. Canada’s benchmark equity index sank 3.1 percent, the most since 2011. The Stoxx Europe 600 Index fell 0.7 percent from a seven-year high. Brent oil slid 3.5 percent to the lowest since October 2009. The yield on 10-year Treasury notes dropped five basis points to 2.26 percent. Gold jumped 1.1 percent while the Bloomberg Dollar Spot Index retreated 0.3 percent.

Energy shares in the S&P 500 traded at a 17-month low. Crude fell into a bear market this year as a supply glut expanded and OPEC chose to leave its output target unchanged. Chinese trade data missed forecasts even as the nation’s surplus climbed to a record in November.

“Oil is leading the way down and a lot of people are in the oil trade, so they’re getting hammered more than others and may be scrambling to create liquidity,” Frank Ingarra, head trader at Greenwich, Connecticut-based NorthCoast Asset Management LLC, said via phone. “There’s a lot of noise and people aren’t really stepping in yet.”

Trader Fred DeMarco rushes across the floor at the closing bell of the New York Stock... Read More

Energy stocks extended losses as Laszlo Birinyi, president and founder of money-management and research firm Birinyi Associates Inc., told CNBC “I don’t want to touch the oil stocks.”

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http://www.bloomberg.com/news/2014-12-07/dollar-extends-surge-on-payrolls-as-asian-futures-climb.html