Today OPEC announced that they would not curtail oil production, thus ensuring a continued drop in oil prices. With oil already 30% off this summer’s high, how low can it go? I don’t know, maybe $50/barrel…we’ll have to wait and see.
One thing that’s not disputable is the positive effect that lower oil prices will have on oil consumers. The transportation sector is up nearly 13% in just the past five weeks.
Watch for the value rotation to continue- money will flow out of energy producing stocks and into energy consuming sectors.
For years, this protracted stock market rally has been juiced by the Federal Reserve’s artificially low interest rates, lower petroleum costs should spur things along for a little while longer.
Listen to the Wealthsteading Podcast to receive updated market commentary: www.wealthsteading.com