Nov 28, 2014 8:23 AM
Plunging crude prices hammer energy companies
The Associated Press
NEW YORK (AP) A decision by OPEC this week to maintain current levels of oil production hammered major energy companies in the U.S. and abroad.
Many energy experts had expected the group of oil producing countries, which met in Vienna this week, to act to halt a slide in the price of crude since this summer.
A barrel of benchmark U.S. crude, which cost well above $100 as recently as June, had fallen to about $73 as of this week. OPEC announced Thursday that it would not cut production.
The effect was immediate.
The price of benchmark U.S. crude tumbled 10 percent Friday to settle at $66.15 a barrel.
Shares of companies across the energy industry fell. Chevron Corp. slid 5 percent while Exxon Mobil fell 4 percent. Newfield Exploration fell the most among companies in the Standard & Poor's 500 index, dropping 16 percent.
But the pain being felt by energy producers is proving to be a big gain for consumers and businesses that are heavily reliant on energy.
Riding high are the airlines, package delivery services and cruise lines, which are spending less on fuel. Southwest Airlines rose 6.5 percent Friday, the most in the S&P 500 index, while Delta Air Lines Inc. was the second-biggest gainer, climbing 5.5 percent.