Oil sees worst week in 3 years

Bloomberg

Oil notched its biggest weekly loss since the depths of the last price crash, as record Saudi output and a global stock sell-off intensified crude’s free fall.
Futures slid below $60 in London and ended the week down about 12 percent, the worst showing since January 2016. Traders focussed on the growing risks of a new glut of crude after Saudi Arabia’s oil minister said that production from the world’s largest exporter had climbed further this month.
Oil joined a swoon in equity markets nervous about international trade and a weakening economy. The S&P 500 Index fell to its lowest mark since May while European markets lost ground after a report showing a slowdown in Germany. Energy companies led declines, with shale drillers Concho Resources Inc and Devon Energy Corp each down more than 5 percent.
“Crude’s getting shellacked,” said Kyle Cooper, director of research at energy consultant IAF Advisors in Houston. “The equities are giving a foreboding sign for overall economic growth.
I think that’s what’s disturbing people.”
In the US, West Texas Intermediate (WTI) oil prices slid towards $50 a barrel, the baseline at which many large shale explorers set their budget this year, RBC Capital Markets analyst Scott Hanold said in a note
to clients. Smaller producers planned on even more, predicating budgets on WTI prices 10 to 15 percent higher, he wrote.
“Outside of a few better-positioned companies, demonstrating free cash flow will be challenging at current oil prices,” Hanold said.
Crude collapsed into a bear market this month after the US allowed some nations to continue buying Iranian supply. Trade tension between America and China is raising
concerns over demand and Trump renewed a call for lower oil prices.