Virus Concerns Knock Global Equity And Energy Markets Lower
Fear has taken hold of financial markets again with new virus concerns outside of China knocking global equity and energy markets sharply lower to start the week. Safe havens like U.S. treasuries and gold are reaching multi-year highs, while most other risk assets are seeing heavy losses. Refined products are off nearly 10 cents from Thursday’s high trade, snapping the upward trend lines that had formed in the past two weeks, and threatening a test of the February lows.
Money managers had mixed reactions last week, reducing net length in WTI and Brent crude oil contracts to multi-month lows, but increasing bets on higher RBOB prices for a second straight week, and reducing the net-short position in ULSD. Based on the selling we saw to end last week, and start this one, we could see another large liquidation in this week’s report.
Baker Hughes reported one new oil rig put to work in the U.S. last week, with the total rig count holding steady so far for the year.
Saudi Arabia is reportedly considering breaking the OPEC/Russia alliance and making a new output cut to limit the damage to oil prices.