I follow oil very closely, and I cannot remember any market carnage like this before.
Even forgetting the 14 days down in a row (a record), today’s -8% spanking had better be some sort of major capitulation.
Obviously there’s a ton of shale drillers out there whose unhedged production revenue projections just got destroyed.
You know, the ones with a ton of junk debt. Speaking of which:
While equities got more or less “stabilized” for the day, junk debt closed at a new low for the move. Yes, this only takes us back to the price levels seen in July, but just like in early October the volume was heavy.
Given the rapid rises in interest rates, coupled now with the major bear market in oil prices, the junk space could be facing many hundreds of billions in losses. I certainly hope the financial planners and pension managers still holding this crud “for the yield” are exercising every possible fiduciary responsibility for their clients.