- Oil prices fall in line with another decline across global stock markets on concern about a U.S. government shutdown and a worsening world economy.
- US crude drops below $43 a barrel for the first time since June 2017.
- Investors flock to perceived safe-haven assets such as gold and government debt, at the expense of crude oil and stocks.
U.S. crude plunged nearly 7 percent on Monday, hitting its lowest levels in a year and half, as the oil market fell in tandem with equities amid deepening turmoil in Washington DC.
The Dow Jones Industrial Average plummeted more than 600 points, while the S&P 500 closed in bear market territory. Both stock indexes were buffeted by headlines out of Washington, including a government shutdown and President Donald Trump‘s reported desire to fire Federal Reserve chair Jerome Powell over the central bank’s interest rate increases.
The selling in global risk assets on Christmas Eve deepened a nearly three-month slide in oil prices. From peak to trough, U.S. crude has fallen nearly 45 percent from its 52-week high at the start of October. Brent has fallen as much as 42 percent over the same period.
“For now, there’s no place to hide in any of these markets. Oil’s being taken down with the stock market and the negative sentiment that’s sweeping across really everything, and for now the downward pressure is going to persist,” John Kilduff, founding partner at energy hedge fund Again Capital told CNBC’s “Closing Bell” on Friday.