“We’re following equities,” Peter Cardillo, chief market economist at Spartan Capital, told the Wall Street Journal. “The market had found a floor over the past couple days, but today with equity markets continuing to move toward bear-market territory, nothing isn’t fair game.”
Oil prices have previously hit multi-year highs in mid-2018 after President Donald Trump withdrew from the Iran nuclear deal, which reinstated sanctions against the Middle Eastern country’s crude exports. Iran’s oil shipments have since declined by over a third and analysts expect more than a million barrels per day could be cut off from the market by the first quarter of 2019.
“We are entering an unprecedented period of uncertainty in oil markets,” International Energy Agency executive director Fatih Birol said at a conference in Norway, according to Business Insider. The IEA has already warned that Trump’s Iran sanctions could make maintaining global supply “very challenging.”
Some analysts, though, argue that energy traders were following market momentum as many dumped crude futures in favor of natural gas contracts, which have surged 40% over the last month on the colder-than-expected weather outlook.
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