After falling for six straight months, oil prices are still in search of a bottom. A greater than 50% plunge over the past year is the second-largest annual decline on record. Sector share prices have followed suit. The SPDR S&P Oil & Gas Exploration & Production ETF (NYSEMKT: XOP), for example, is down more than 40% from its 52-week high. Considering previously planned production increases are still boosting the supply of oil, investors are left to wonder when the bleeding will stop. Read More
After falling for six straight months, oil prices are still in search of a bottom. A greater than 50% plunge over the past year is the second-largest annual decline on record. Sector share prices have followed suit. The SPDR S&P Oil & Gas Exploration & Production ETF (NYSEMKT: XOP), for example, is down more than 40% from its 52-week high. Considering previously planned production increases are still boosting the supply of oil, investors are left to wonder when the bleeding will stop. The sell-off has been especially pronounced over the past two months, leading to a huge spike in volatility. The OVX index, a measure of West Texas Intermediate Crude’s (WTI) implied volatility, has spiked sharply and is now at its highest level since 2012 despite relative calm in the VIX volatility gauge for equities. And with more oil supply coming in the near-term (thanks to nearly $300 billion in energy exploration spending in the U.S. alone last year), few expect a quick rebound in prices or a drop in volatility. The tug-of-war… Read More