Oil prices continue to slide and have now fallen into ‘bear’ territory, dropping 20% this year, notes the analysis team at ANZ.
“While crude supplies fell 2.45 million barrels last week, US production has now risen to the highest level in two years. Energy stocks have borne the brunt of falling prices and energy junk bonds are the cheapest since last November, though we’re not seeing broader contagion. Concerns remain that the supply glut will continue. OPEC (and allies) may have pared back production but that’s being offset by relentless drilling in the US and more output in Libya. The oil-induced push to inflation in late 2016 and early 2017 has turned into an extraction.”
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