Oil Stocks Slumping

November 28th, 2014 6:27 am | by John Jansen |

Bloomberg News reports that Chevron and Mobil are each down more than 4 percent in early equity market trading.

Via Bloomberg:

U.S. Stock-Index Futures Decline After Opec Decision

U.S. stock-index futures fell, as the equities market reopens after the Thanksgiving holiday, with energy stocks tumbling after OPEC’s decision to keep its output target unchanged.

Exxon Mobil Corp. and Chevron Corp., the oil and gas stocks with the biggest weighting on the benchmark Standard & Poor’s 500 Index, fell more than 4 percent in early New York trading. American Airlines Group Inc. and Delta Air Lines Inc. climbed at least 5 percent.

Contracts on the S&P 500 (SPX) fell 0.3 percent to 2,066.9 at 10:07 a.m. in London. Dow Jones Industrial Average contracts dropped 42 points, or 0.2 percent, to 17,768. U.S. equity markets shut at 1 p.m. New York time today.

The S&P 500 closed at a record on Nov. 26 and is heading for a second monthly gain. It has rallied 11 percent from its low last month as data signaled the U.S. economy is improving, and central banks around the world boosted stimulus measures.

“The larger story is the sharp oil-price dip overnight,” Richard Hunter, head of equities at Hargreaves Lansdown Plc in London, wrote in an e-mail. “That’s expected to continue the pressure on the oil majors, while at the same time giving a fillip both to the consumer — an effective tax cut — and indeed the airlines.”

Oil Decline

West Texas Intermediate crude oil dropped 7 percent from its Nov. 26 close, the biggest loss in three years, as the Organization of Petroleum Exporting Countries yesterday agreed not to reduce its production ceiling even after oil collapsed into a bear market this year.

Exxon Mobil declined 4.5 percent to $90.26 and Chevron lost 4.1 percent to $110.35. Schlumberger Ltd., the world’s biggest provider of oilfield services, slipped 4.6 percent to $88.50.

American Airlines, the world’s largest carrier, climbed 5 percent to $47.22. Delta Air Lines added 8.1 percent to $47.80. Southwest Airlines Co. rallied 6.2 percent to $41.70.

Retail stocks may be active, as an estimated 140 million U.S. shoppers go to stores and online for the Black Friday weekend. The National Retail Federation projected a 4.1 percent gain in retail sales in November and December, the biggest increase since 2011.

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