Crude Oil Declined Sharply on June 10


Dec. 4 2020, Updated 10:53 a.m. ET

WTI crude oil stays below $50 

Crude oil fell sharply on Friday, June 10, 2016, affected by weakness in the global markets and the strong dollar. At 12:27 PM EDT, WTI crude futures for July expiry were trading at $49.31 per barrel, a drop of ~2.5%. Brent crude was trading at $50.68, a decline of ~2.4%.

The sharp decline in oil prices also weakened the sentiment around the European markets, which were already under pressure from the ECB president’s comments.

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Global markets declined on Friday

The ongoing concerns on the Brexit vote amid the increasing possibility of Britain leaving the European Union pressured European markets on Friday and resulting in a global selloff. On June 10, the major European index FTSE 100 fell by ~1.9%, France’s CAC 40 fell by ~2.2%, Switzerland’s SMI declined by 1.9%, and Germany’s DAX fell by ~2.5%.

Among the major global indexes outside the European markets, Japan’s Nikkei 225 fell by 0.4%, Hong Kong’s Hang Seng fell by 1.2%, China’s Shanghai Complex declined by 0.3%, and Australia’s ASX fell by 0.75%. The major Indian indexes BSE Sensex and CNX Nifty fell by 0.48% and 0.41%, respectively. The S&P 500 Index closed 0.92% lower on Friday.

In addition to the Brexit factor, the “lasting economic consequences because of weak productivity” warning from the ECB president, Mario Draghi, also weighed on global markets—especially on European indexes on Friday.

Rig count increased for second consecutive week- Baker Hughes

According to the oil rig count data released by Baker Hughes (BHI) at 1:05 PM EDT on Friday, the oil rig count increased for the second consecutive week to 328. This represented an increase of three during the week. This is keeping additional pressure on crude oil prices on Friday amid a weak global economic situation and a stronger dollar.

At 1:25 PM EDT, major crude oil producers Carrizo Oil & Gas (CRZO), Canadian Natural Resources (CNQ), British Petroleum (BP), and Total S.A. (TOT) fell by ~4.9%, ~3.0%, ~2.1%, and 3.1%, respectively. The SPDR S&P Oil & Gas Exploration and Production ETF (XOP) and the Power Shares DB Oil ETF (DBO) fell by ~4.2% and ~1.9%, respectively.

The next article explains the performance of crude oil–related stocks on Friday, June 10.


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