Oil’s strong decline is encouraging a selloff in stocks beyond energy companies and leaving investors with few havens as assets from metals to corporate debt sink.
Brent crude fell below $65 for the first time since 2009 as OPEC cut its forecast for 2015 demand, raising concern over the strength of the global economy and leaving investors contemplating when oil’s plunge will reach a bottom.
“As great as it feels to pump $2 gasoline at the station, it’s not a healthy environment for financial assets,” Walter Todd, who oversees about $1 billion as chief investment officer for Greenwood, South Carolina-based Greenwood Capital Associates LLC, said in a phone interview. “It’s rare to see commodity prices fall this quickly in a non-recessionary situation. You really need to see some stabilization.”