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Crude Oil Prices Decline on Concern over Default

By  +Follow October 15, 2013 9:53AM
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The price of crude dropped Tuesday, with futures contracts for November 13th delivery trading down almost 1.3 percent for West Texas Intermediate and over 1 percent for Brent. The primary culprit appears to be persistent concern over the government shutdown and the possibility of a default on American debt.

Potential Debt Default Drives Down Prices

At the heart of falling crude prices was continued concern over the potential for a government debt default. The potential economic collapse that would follow a debt default would most likely result in decreased demand for crude at home and abroad, making oil a much less attractive investment for some.

"Crude oil prices retreated ... as the US budget issues in Washington weighed on market sentiment and raised persistent concerns about a slowdown in the US oil demand," said Sucden brokers analyst Myrto Sokou on Monday. "The main focus remains on the US debt ceiling and government shutdown as the markets are hoping for a resolution to the issue before Thursday's deadline."

Oil markets kept a close eye on news out of Washington, but Tuesday seemed to indicate that the stalemate wasn’t coming to an end.

Supply Up As Well

The continued drop in prices comes after prices reached a 14-week low last Wednesday when the government reported higher-than-expected inventories of crude, adding the price-pressure of increased supply to the already present potential for decreased demand.

"We seem to be tipping the scales back toward another test of $100 a barrel," said Tradition Energy broker and analyst Gene McGillian on Wednesday.

ETFs Hit as Well

Plunging crude prices hit ETFs hard as well, with the United States Oil Fund ($USO) dropping over 1 percent and the PowerShares DB Oil Fund ($DBO) declining over 0.5 percent. Joining them were several equities ETFs tracking oil producers, with the Market Vectors Oil Services ETF ($OIH) off over 0.5 percent, the iShares Dow Jones US Oil Equipment ETF ($IEZ) dropping almost 0.65 percent, and the SPDR S&P Oil & Gas Equipment & Services ETF ($XES) plunging over 1 percent.

 

[Image Courtesy of Wikimedia Commons]

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Results for uso
Angel Dan
26 Mar 15 23:27:39
@PipsToDollars and gona be short slapping it tomorrow $USO
TV_Trading Ideas
26 Mar 15 23:26:14
20sh would be good area to start short position $USO http://t.co/ZcoiFV6SCj
OM_freebies
26 Mar 15 23:24:06
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Lihua
26 Mar 15 22:25:22
RT @StockTwits: Oil is crashing. BUT, it's still never closed lower (monthly) than when it did in 2008 http://t.co/OFndOPiF7w $USO http://t…
Lihua
26 Mar 15 22:23:23
RT @StockTwits: This is an epic harmonic bullish bat. Crude oil since 2003. Chart by @andrewunknown http://t.co/FjKsquNLSe $USO http://t.c…
SmallCaps
26 Mar 15 22:02:48
http://t.co/FnKjvTaom4 <-- Let me tell you a story about how knowledge is power in trading..$CL_F $USO $QM_F $XOIL
Live Market News
26 Mar 15 21:20:25
RT @StockTwits: If crude oil reverses now, it will form one of biggest swings in energy market history -> http://t.co/hnXJRBBSG0 $CL_F $USO
DjangoBlockchained
26 Mar 15 21:03:32
If crude oil reverses now, it will form one of biggest swings in energy market history -> http://t.co/8OoRo7njWV $CL_F $USO
royfberger
26 Mar 15 21:03:08
Be water, my friends. Be water. $MSFT $SPY $F $AAPL $HYG $IMAX $RIG $YHOO $USO $HUN http://t.co/8mR4s08jCl http://t.co/AMjzt5TzfX
GuerillaStockTrading
26 Mar 15 21:02:24
Oil Storage in the U.S. Running Out $USO $WTIC http://t.co/tkh10TO5lo http://t.co/VYwRLLV7ny
WLST.com
26 Mar 15 20:50:36
Fears That Iran Will ‘Flood’ the Oil Market Exaggerated $USO | BlogParser $USO http://t.co/S6DviI426U http://t.co/ZSQ27yVFaR
blogparser
26 Mar 15 20:50:23
Fears That Iran Will ‘Flood’ the Oil Market Exaggerated $USO: Oil industry experts say it is unlikely... http://t.co/AdX4kvD6fE #markets
Hedge AccordingLy
26 Mar 15 20:45:59
Large reserves of crude oil found in Sindh $USO | http://t.co/JkElrNXhcF http://t.co/aTgmGyDG2x
HedgeBz Top News
26 Mar 15 20:45:58
Large reserves of crude oil found in Sindh $USO | http://t.co/UnAeYSZoD5 http://t.co/PShmMGeczW
SmallCaps
26 Mar 15 20:40:29
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Hedge AccordingLy
26 Mar 15 20:37:08
Fears That Iran Will ‘Flood’ the Oil Market Exaggerated $USO | http://t.co/KaHcrR195i http://t.co/TPrFnjZwv6
HedgeBz Top News
26 Mar 15 20:37:06
Fears That Iran Will ‘Flood’ the Oil Market Exaggerated $USO | http://t.co/NK5wdbKScl http://t.co/Z3I7RRr3mi
The Cardiac Kid
26 Mar 15 20:30:10
ospreyeye: $UWTI $DWTI $WTI $USO - War in Yemen: ospreyeye http://t.co/TeRKwrQsfz
BCC
26 Mar 15 20:23:08
$USO oil is easing as market digests Yemen crisis. $1 drops http://t.co/19rCY7W6nh
Rami Alnajjar ♜
26 Mar 15 20:14:58
فرصه لضرب #النفط $USO
DWreck
26 Mar 15 19:47:39
RT @metamacro: Have Oil Prices Bottomed? http://t.co/siAS2jkojd via @barronsasia $CL_F $USO
TalkMarkets
26 Mar 15 19:39:01
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BorderlineTV
26 Mar 15 19:37:59
RT @StockTwits: There's a massive conflict brewing in Yemen and here's how crude oil is reacting http://t.co/7ylUqMTVCs $CL_F $USO http://t…
pjraitt
26 Mar 15 19:20:49
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dank tank
26 Mar 15 19:12:43
RT @moon_shine15: 79 more follows to 3k -- lemme get a RT if you've made $$$ off #CrystalBallCalls #TradeWithMoonshine $PVA $EXXI $USO $MIN…
Paco Al
26 Mar 15 19:04:39
RT @Palmieri888: $PBR 5.91 -1.99% $USO +2.71%
Woll Street
26 Mar 15 18:38:44
$USO look at March 4th candle and position on $USO - Exactly same. Like $USO > 18.30 swing to 19.10.... but not if loses 17.98 50MA.
Woll Street
26 Mar 15 18:35:42
@pnani456 $USO look at March 4th candle on $USO - Exactly same. Like $USO > 18.30 swing to 19.10.... but not if loses 17.98 50MA.
Jim Thomas
26 Mar 15 18:34:43
RT @moon_shine15: 79 more follows to 3k -- lemme get a RT if you've made $$$ off #CrystalBallCalls #TradeWithMoonshine $PVA $EXXI $USO $MIN…
Alpha Maven
26 Mar 15 18:28:14
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Jason Olive
26 Mar 15 18:24:05
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James DiPlata
26 Mar 15 18:22:09
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gordon gekko is god
26 Mar 15 18:20:07
RT @SA_FinancialInv: It's Time To Sell IberiaBank http://t.co/acAE5OtPDg $FFIN $FIBK $GNBC $MSL $USO $IBKC
Víctor
26 Mar 15 18:18:12
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Financial Stocks
26 Mar 15 18:17:38
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Quick Stock Ideas
26 Mar 15 18:17:38
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Seeking Alpha
26 Mar 15 18:17:38
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V-Trader
26 Mar 15 18:16:33
Crude pops everytime we get war news. Bounce usually fades $USO $XLE
John L. Bair
26 Mar 15 18:16:15
RT @StockTwits: There's a massive conflict brewing in Yemen and here's how crude oil is reacting http://t.co/7ylUqMTVCs $CL_F $USO http://t…
John L. Bair
26 Mar 15 18:15:50
RT @StockTwits: If crude oil reverses now, it will form one of biggest swings in energy market history -> http://t.co/hnXJRBBSG0 $CL_F $USO
Bid The Ask
26 Mar 15 17:59:32
RT @moon_shine15: 79 more follows to 3k -- lemme get a RT if you've made $$$ off #CrystalBallCalls #TradeWithMoonshine $PVA $EXXI $USO $MIN…
Forex Fractals
26 Mar 15 17:56:03
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yordany suarez
26 Mar 15 17:47:38
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Nancy Reid
26 Mar 15 17:47:12
RT @MarathonWealth: Retail investor flows to $USO $OIL worrisome. MT @GlobeandMail Why #Oil traders are keeping close watch on ETPs http://…
David A. Ferris
26 Mar 15 17:43:13
RT @david_settle: 03/26/15 - Today's Market Forecast™ video can be viewed here: http://t.co/OnZDNvhI3x $SPY $USO $TLT $GLD $XLF $GGP
SmallCaps
26 Mar 15 17:42:51
http://t.co/FnKjvTaom4 <-- Let me tell you a story about how knowledge is power in trading..$CL_F $USO $QM_F $XOIL
LadyLeMans
26 Mar 15 17:34:32
RT @nj46nick: @LadyLeMans @moon_shine15 $mdcn/profit. $uso/profit.$oxis/profit.$pva/profit
Alex Jaffurs
26 Mar 15 17:33:21
RT @moon_shine15: 79 more follows to 3k -- lemme get a RT if you've made $$$ off #CrystalBallCalls #TradeWithMoonshine $PVA $EXXI $USO $MIN…
gar
26 Mar 15 17:31:15
RT @moon_shine15: 79 more follows to 3k -- lemme get a RT if you've made $$$ off #CrystalBallCalls #TradeWithMoonshine $PVA $EXXI $USO $MIN…
Juan Cruz
26 Mar 15 17:22:18
RT @BlackDiamondRsc: The World's Greatest Oil Chokepoints, And Why Yemen Matters http://t.co/Gd8ERM3G44 from @zerohedge #oil #wti $USO $OIH…
				
				
By  +Follow October 15, 2013 9:53AM
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