OIL BOUNCES BACK FROM 2020 CRASH, MEANWHILE $QQQ FALLS
March 5, 2021
In one of the most bizarre events of 2020, a crash in oil demand caused its price to go negative. Today, the 13 member nations of the Organization of the Petroleum Exporting Countries (OPEC) made the decision to cut oil output, allowing oil to jump to its highest price in nearly two years. OPEC, led by Saudi Arabia, is responsible for 44% of global oil production. On the news, Crude Oil ETN $OIL, which tracks the price of oil on markets, rose 4.7% today.
Given that rise of oil in the aftermath of the decision, our Rippers today share a common theme: W&T Offshore, PDC Energy, Continental Resources, QEP Resources, SM Energy Company, and Diamondback Energy are all oil & gas exploration companies. The small-cap oil players jumped roughly 13% in aggregate. These players helped the oil tracking & gas exploration/production ETF $XOP rise 4%.
As oil tee’d off, the rest of the market was in decline over pessimism around interest rates, economic growth, and market health. Call that Bullish Dippers! The tech-heavy NASDAQ had the largest drop today, with $QQQ falling over 2% intraday. Leading up to today’s sell-off, prominent investors like Michael Burry (who predicted the 2008 housing crisis) warned about a market collection and stagnation