Oil had a terrible week compared to just about everything else

The dark days are back.
The dark days are back.
Image: Reuters/Wahyu Putro A/Antara Foto
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Just when you thought we were out of the bear market for oil, traders have pulled us right back in. The price of Brent crude fell to $50.82 a barrel at the end of the week, down more than 7% on the week and off more than 26% from late May. Another week like this and it will fall past its March nadir.

As noted earlier this week, the conventional wisdom explaining the drop points to a sluggish China, a resurgent Iran, and growing activity in America’s shale-pumping heartland. And though oil inventories are falling again, the rig count is going in the opposite direction.

Oil companies have been seriously banged up this year (paywall), with layoffs still being announced and the energy-heavy mining and logging section of the economy shedding the biggest percentage of jobs last month (paywall). Oil-services giant Transocean, whose stock is down more than 36% since late May, discussed the turmoil on its earnings call this week. Per Terry Bonno, the company’s vice president for marketing:

And then when we saw the retreat of commodity pricing here recently, and it’s become a, well, you know, we want to take a wait-and-see; we’d like to have a little bit more stability. So that’s what it’s going to require. It’s going to require more stability in commodity pricing. As I said in my opening comments, anything that’s below $50 is just very concerning for all of our customers.

In plain English: We thought the madness was over, too.