Oil Prices Fall to 7-year Low; Stocks Falter
Prices for benchmark Brent crude fell below $40 a barrel Tuesday, while closely-watched price for West Texas Intermediate fell to that level in Monday's trading
Crude oil prices fell to their lowest level since 2009 in Tuesday's global trading. The latest in a long string of price plunges follows Friday's meeting of the Organization of Petroleum Exporting Countries that failed to reach a consensus to cut oil production. They might have raised prices by limiting supplies. Experts say current oil supplies are significantly higher than oil demand. That oversupply is expected to grow even more as Iran, one of the world's largest oil suppliers, gets out from under international sanctions that limit its exports. Worries about slackening demand were also heightened by forecasts for mild winter weather in the United States, which could cut the need for heating oil. Prices for the benchmark Brent crude fell below $40 a barrel Tuesday, while the closely-watched price for West Texas Intermediate fell to that level in Monday's trading. Worried investors sold stock in oil companies and the firms that supply and support the oil industry. The selloff of these large companies helped push down stock prices on major indexes around the world. Declining oil prices also "weighed" on credit profiles of major oil exporters, according to the Fitch rating agency. Fitch experts are calculating the impact of falling oil revenue on government budgets. They are also watching how well the affected nations cope by cutting expenses, finding other revenue sources, devaluing their currencies or taking other actions.