Amidst coronavirus fears and the start of a price war with Russia and Saudia Arabia, oil futures Monday suffered their biggest one-day percentage plunge since the Gulf War in January 1991.
The price of oil sank nearly 20 percent after Russia refused to roll back production in response to virus-depressed demand and Saudi Arabia signaled it will ramp up its own output. While low oil prices can translate into cheaper gasoline, they wreak havoc on energy companies and countries that count on petroleum revenue, including the No. 1 producer, the U.S.
The carnage in the energy sector was particularly bad. With benchmark U.S. crude dropping to under $32 a barrel, Marathon Oil, Apache Corp. and Diamondback Energy saw their stocks sink more than 40 percent. Exxon Mobil and Chevron were on track for their worst days since 2008.
|XOM||EXXON MOBIL CORP.||56.20||-0.45||-0.79%|
“We knew it was going to be a hot day,” said John Spensieri, head of U.S. equity trading at Stifel. He said that the mood was “organized chaos” in the morning but that the trading halt achieved what it was supposed to by stopping the slide.
The dark cloud over it all is the growing coronavirus outbreak. So far it has infected more than 110,000 people worldwide and killed around 3,900, leading to factory shutdowns, travel bans, closings of schools and stores, and cancellations of conventions and other gatherings. In the U.S., the number of people infected climbed to around 600, with at least 22 deaths.