Watch the prices of our leading oil and gas groups plunge today – companies such as Santos, Woodside, Oil Search, BHP Billiton Beach Energy, Drillsearch and more – after world oil prices fell sharply again overnight.
In fact the shares in these companies will follow iron ore producers lower – both commodities saw big falls overnight after big slides last week.
BHP Billiton will be especially exposed and it will slide under the $US26.01 close yesterday which was the lowest the shares have been since the start of the year.
Oil futures settled at their lowest levels since mid-April.
US type crude for August delivery dropped a nasty $US4.40, or 7.7%, to settle at $US52.53 a barrel in New York. Marketwatch said that was the lowest settlement since April 13.
In London August Brent crude was down 4.9% or $2.97 a barrel to $US57.38.
Brent crude fell 4.7% last week, while US counterpart US crude in New York was down 7%.
Both contracts showed the biggest drops since the week ending March 13.
Analysts said there was a combination of reasons for the slide – the problem with Greece, the market rout in China, the looming oil and nuclear deal with Iran and a feeling the US oil sector is starting to build production once again – as official figures last week showed, and last week’s rig use report from Baker Hughes showed the first rise in the number of drilling rigs for 30 weeks.
The US dollar wasn’t much of a factor at all as currencies didn’t move much at all over the past 24 hours. The Aussie dollar strengthened a touch if anything, to trade around 74.90 US cents.
Gold rose by around $US5 an ounce to $US1,168 – it would not have done that if the dollar had been rising strongly because of the problems in Greece.
Copper prices sold off as well (another big negative for BHP and Rio Tinto) – Comex prices in New York plunged more than 4%, or over 10 cents a pound to $US2.5235 a pound, less than 3 cents above the five year low of $US2.4950 reached on January 30.
