(as of 7:10 AM PST)
The energy sector is falling heavily this morning and taking market indexes down as well. The OPEC conference ended without a decision on production output for member states and it is widely thought that member nations will independently increase production, adding to the global glut of oil well into 2016. It is currently estimated that oil production is about 2 million barrels a day higher that demand and, with more to come, prices have nowhere to go but down. The rest of the market is holding up reasonably well, given last Friday's huge rally, although the oil story and underlying terrorist fears are creating downside momentum which might spread as the day wears on. The US dollar is on a tear. With the Fed poised to raise interest rates, and investors seeking a safe haven, it is understandable why the US currency is soaring. A strong dollar is usually bad for other commodities, and today is no exception, with gold and silver prices to the downside again. For the long term, lower oil prices are bound to be a boon to the US economy, but for now fears of less capital investment into the energy sector is the more powerful market mover and negative action is likely to persist through the day.
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