Price of crude oil falls to a fresh four-year low

November 28, 2014, 1:32 PM UTC
View of Venezuela's Amuay Oil refinery during daybreak in Punto Fijo
A view of Venezuela's Amuay Oil refinery during daybreak in Punto Fijo, 545 km (340 miles) west of Caracas, May 18, 2006. The Army, National Guard and civilian defense groups are currently taking part in exercises of unconventional warfare and resistance meant to repel a foreign invasion and defend Venezuela's territory and sovereignty of around a million-barrels a day Oil refinery of Paraguana, officials said. President Hugo Chavez has said that Venezuela would blow up its oil fields if a U.S. attack he has repeatedly warned about becomes reality. REUTERS/Jorge Silva - RTR1DIEQ
Photograph by Jorge Silva — Reuters

Brent crude fell to a fresh four-year low on Friday, sending oil-related shares and currencies lower, after OPEC decided against cutting output despite a supply glut.

Crude plunged 6.5 percent to $69.38 per barrel. The decline was the biggest one-day drop since May 2011, with prices lowest since 2010.

Brent crude touched a low of $71.12 a barrel after settling at a four-year closing low on Thursday, when Saudi Arabia blocked calls from poorer members of the OPEC oil cartel to cut production to stem a slide in global prices.

Europe’s oil benchmark came off its lows, but remained on track to have lost more than 15 percent in November.

The slump dominated Asian and European trade.

“Crude seems to have no floor right now, and we could easily see the price drop into the low $60s,” said Tony Roth, chief investment officer at Wilmington Trust in Wilmington, Delaware.

The Energy Select Sector SPDR exchange-traded fund fell 5.5 percent to $80.59. Exxon Mobil Corp lost 3 percent to $91.69 while Chevron Corp fell 4.9 percent to $109.47; both are Dow components.

Weakness in oil boosted other sectors, including airlines, which are inversely correlated to oil prices given fuel costs. Southwest Airlines rose 7 percent to $42.05 as the S&P 500’s biggest percentage gainer, followed by Delta Air Lines, up 6 percent to $46.90.

Retailers also rallied, as lower gas prices could increase consumer spending as the holiday shopping season ramps up.

“This low should be very additive to economic activity, not just with gas prices but across the economy,” said Roth, who oversees $80 billion in assets. “Early holiday shopping numbers should come in pretty strong.”

—Reuters contributed to this report.