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USO ETF Oil Prices Plummet 7%

Rough day for oil--down 7%. I know there's a recession expectation and stocks are falling, but that's a lot.


  • edited March 15
    Yes - Big move down in oil this week. Industrial metals getting hammered today too. I see lots of panic. Bloomberg said around noon the Fed is working on the Credit Suisse issue (along with other central banks and regulatory officials) and the U.S. equity markets cut losses in half after that news came out.
  • Thanks for the update. We pared back on energy sector early this year since we expect high probability of recession this year. Also not convinced enough on China story of reopening to hold on.
  • It has recovered to neg 5% but still big move especially as there seems to be not a lot of new data

    Most of what I read indicates that the productivity of new fracking wells in US seems to be falling, indicating supply will be dropping especially as majors seem to have "gotten the message" and are now emphasizing cash flow and shareholder returns rather than production

  • edited March 15
    Yeah, I noticed it recovered some. It is a bit strange. I wonder if any large institutions in particular were getting out, and if so, why?
  • edited March 15
    BRK.b was down almost 3% much of the day. Finished down 2.44%. Yet, AAPL was up for the day. And BOA BAC only lost 1%. Looks like insurance companies got hit. One I watch was down 3.4%. I’d think the issue relates to interest rates in some manner - which were all over the place today. (And some of the weather phenomena contributed too).

    @LewisBraham said: “I wonder if any large institutions in particular were getting out, and if so, why?”

    One i watch, GHC , is 65% institutionally owned. It’s dropped like a rock, losing about 15% the past 10 trading days by my rough count. The why is hard to answer. I tend to attribute moves like that to market manipulation more than to fundamentals. Drive the price down and then buy back in later. Or maybe short sellers at work.
  • edited March 15
    Insurance companies have the SAME HTM & AFS accounting issues. But runs in them are more difficult, but possible - years ago, MBL of NJ in our 403b plan did have a run and collapsed in days. Our money was locked in at lower rates for several years but it was unlocked eventually.

    But BRK is different from most insurance companies and it has lot of other exposure too. Still, in a banking debacle and on a down market day, BRK is down too.
  • Stocks are different from commodities, though, as to who owns them and how they're trading. Entire nations and oil companies themselves buy and sell oil futures. This move in oil is rather unsettling.
  • edited March 15
    ”This move in oil is rather unsettling.”

    Lots of stuff is unsettling, including the escalating U.S. / Russia tensions. Might have played a role in today’s equity sell-off.

    Oil is something I’m unable to understand or invest in. There have always been huge cyclical swings in price that are hard to predict or understand. Go back 30 years and the same was true. So many factors affect price: policies of OPEC members, fracking (or lack thereof), environmental regulation, trade embargos, and of course economic currents as Lewis notes.

    Thanks @yogibearbull. Your understanding of the insurance business far exceeds mine.

  • Oil had somewhat settled into a 70-80 zone. There was some btfd at 70 going on. That unfortunately ran into bond markets gone wild. Stops got triggered. Sharp stop loss selling.

    Berkshire holds up well at first in sell offs It’s defensive quality attracts some. Maybe there is some buybacks. But when market craps, eventually they buy backs stop. Then it’s trades down to catch up with the rest of the hoi polloi.
    Is not the first to bounce back either. First we must grab trash !!;)
  • edited March 15
    Interesting take on Berkshire.:)
  • edited March 15
    Buffett added so much OXY
    Probably sit on it forever 3 - 5 yrs wholile waiting for profits/ collecting quarterly Dividends
  • @yogibearbull

    Ah MBL of NJ Now there is an (awful) blast from the past. The hospital my wife worked at had their 403(b) there. Someone got paid off, obviously because why not use Fidelity or Schwab?

    We learned the hard way what happens when your 403(b) company goes belly up. It took months to get anything back. All this talk about "don't worry if Schwab goes bankrupt, they won't take your securities with them" misses the important point that you may get your stuff back but it will take months.

    It may be different with a publicly traded company than an insurance outfit like MBL

    Don't know
  • edited March 16
    @sma3, I learned a lot about the so-called state insurance then!

    First, our money was tied up for 5-6 years, not months. Rates offered were below high m-mkt rates at the time. So, only opportunity lost, not nominal money.

    I called our state insurance department and said that I wanted my money back. They said, not so fast. States' insurance departments were coordinating the rescue and I will just have to be patient. BUT, if I wanted my money right away, I could take the 40% haircut offer on the table. Well, I "decided" to be patient.

    By now I have personal experiences with 1 bank failure and 2 insurance failures. Only the FDIC is prompt in setting quick up to the limit. No experience with the SIPC, but from the news, I think that they also take their time while brokerage positions held may be frozen.
  • You are correct it was years. Hospital fortunately switched to Fidelity
  • edited March 20
    Oil = $65.96 as quoted on MarketWatch currently. Precious metals continue to rip. Actually, some of the industrial miners have been hot lately (RIO for one). So if we’re heading into a big global slowdown that wouldn’t add up.
    I’d say buckle your seat belts Wednesday morning. Should be fun.
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