[New York Close] Oil Prices Plunge Again... End of Synchronization with Stock Market

Safe assets such as Gold and Dollar Plummet Simultaneously

[Image source=EPA Yonhap News]

[Asia Economy New York=Correspondent Baek Jong-min] International oil prices have returned to a sharp decline. On the other hand, the U.S. stock market rose, breaking away from the synchronization with oil prices.

On the 27th (local time) at the New York Mercantile Exchange (NYMEX), June delivery West Texas Intermediate (WTI) crude oil closed at $12.78 per barrel, down 24.6% ($4.16). The international benchmark crude, June Brent crude also briefly fell into the $10 range during the session but is barely holding at $20.00.

The sharp reversal in oil prices was due to concerns that the oil production cuts were insufficient compared to the reduction in oil consumption caused by the COVID-19 pandemic, raising the possibility of negative oil prices appearing again.

The representative crude oil futures exchange-traded fund (ETF), the 'US Oil Fund,' also failed to avoid weakness. The US Oil Fund announced its intention to sell June WTI contracts, further increasing market concerns. In this case, it cannot be ruled out that June WTI prices could plunge into negative territory as the expiration date approaches.

Meanwhile, the New York stock market rose across the board that day. The Dow Jones Industrial Average increased by 358.51 points (1.51%) to close at 24,133.78, the S&P 500 rose 41.74 points (1.47%) to 2,878.48, and the Nasdaq index gained 95.64 points (1.11%) to finish at 8,730.16.

The stock market focused on the increasing number of states resuming economic activities. Following Georgia and Oklahoma, New York State also announced plans to begin phased normalization after May 15, stimulating investor sentiment.

Of course, some emphasized caution regarding the stock market rise. Jeffrey Gundlach, CEO of DoubleLine Capital, known as the 'new bond king,' stated, "I think the lows could be tested again."

Safe-haven assets all declined. On the New York Commodity Exchange, June delivery gold fell 0.7% ($11.80) to close at $1,723.80 per ounce. The dollar index, which shows the value of the U.S. dollar, and U.S. Treasury futures also saw price declines.

This content was produced with the assistance of AI translation services.