Plunging crude prices hammer energy companies
NEW YORK (AP) - A decision by OPEC this week to maintain current levels of oil production is hammering 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 free fall in the price of crude oil 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 in hopes of hurting producers in the U.S. and elsewhere that have been flooding the market with crude and natural gas.
The effect was immediate.
Crude prices tumbled more than 6 percent early Friday and were within $2 of hitting levels not seen since September 2009, when the U.S. was sliding into its worst economic crisis since the Great Depression.
Shares of large energy companies including Chevron Corp., ConocoPhillips, Exxon Mobil Corp. and Marathon Oil Corp. all fell around 4 percent. Britain's BP Plc. fell 6 percent.
The pain being felt by energy producers is proving to be a big gain for consumers and businesses that are heavily reliant on energy.
Cheap energy has already been cited for lifting the spirits on Main Street as people spend less at the pump and put more goodies into their shopping bags.
Also riding high are the airlines, package delivery services and cruise lines, which are spending less on fuel. Delta Air Lines rose 4 percent before the opening bell Friday, As did United Continental Holdings Inc. and American Airlines Group Inc.
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