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Market Overview

Monday's Market Minute: Crude Oil Crushed

Monday's Market Minute: Crude Oil Crushed

Equity index futures are pointing to a flat open to begin the week. The focus this morning is on Crude Oil futures and the move lower to an 18-year low overnight — to levels we haven’t seen since 2002 — as coronavirus demand destruction continues to take its toll on price. The International Energy Agency (IEA) warned that global oil demand could fall by 20 million barrels per day, and Russia’s energy minister over the weekend shot down rumors that they were willing to negotiate with OPEC.

As a result, the WTI Crude Oil contract traded to 19.92, taking out the prior March low of 20.52, while the Brent Crude contract still has yet to take out the March low set back on the 18th at 24.51. It was interesting to see Crude Oil shrug off the rally in the indices last week, as they often track each other very closely. Many saw that as a sign that we should be skeptical of the move up in stocks.

This week, keep an eye on not only the new lows in Crude, but the relationship Crude shares with the indices as it’ll be key to see if lower oil prices weigh on them. Also this week, keep an eye on economic data. We have Pending Home Sales, ISM Manufacturing Index, EIA inventories, Jobless Claims, and (the big kahuna) the monthly jobs report on Friday to cap things off. Labor will be closely watched and is directly tied to the price of oil and the recent decline. Stay tuned to the TD Ameritrade Network all week for coverage of all the breaking news and the market reaction!