The market is tanking across the board (and dragging the S&P with it) on the results of the OPEC meeting for November on Wednesday. The meeting officially cemented the long suspected decision by the cartel to keep oil production and output at current levels, despite the crashing prices and global glut of Crude oil.
Saudi Arabia determined production would remain at current levels - as the largest producer in the group, they essentially set the policy. Several smaller members reportedly wanted to curb supply to raise prices, largely because a huge part of their country's economy runs off of the money generated from oil sales.
Today we're just watching product prices tank across the board, Crude is below 70 for the first time in almost 5 years. Today's trading alone saw a 9% decline in price. Yowza.
Crude closed out the day at 66.15, -7.54/bbl.
ULSD closed out -.1657 to 2.2308 for December and -.1679 to 2.1612 for January (this was the last day for DEC trading)
Gas closed off -.1312 to 1.9039 for December trading and -.1843 to 1.8276 for January. Under 2 dollars on the screen?! Its been quite some time since thats been the case!
There could be some interesting geopolitical and other ramifications from the record drops on commodities. Countries like Russia who base a lot of their economy on projected oil revenue are really feeling the decline, and we will have to see how long their economies can withstand the steep drop in renevue.
Domestically, the resultant falling gas prices are a positive for consumers obviously. They can also be a huge relief to construction, manufacturing, and transportation companies, as well as general retailers.
Its said that every ten cent drop in the price of gasoline unlocks 3 billion dollars to be spent elsewhere. (According to Wells Fargo). We may get a quick confirmation or refutation of that theory when the numbers start rolling in on the prime shopping season that kicked off today with the infamous "Black Friday", the Superbowl of shopping.