Eddy Elfenbein submits: The Energy Sector is getting smacked around today, and frankly, it’s long overdue. Two weeks ago, I mentioned how the Dow Jones Oil & Gas Index (^DJUSEN) kept makes charges at 500, but the index couldn’t seem to break through. Right after my post, it happened again. The index hit 500, and wham-o—it's back down again.
Today oil is down to $68.25 a barrel. Less than two months ago, oil came within a hair of $80. According to GasBuddy.com, prices at the pump have turned sharply lower in the last month. The average price for gas is down about 30 cents a gallon.
What’s going on here? One of the reasons for the fall in oil prices is that we’re now at the end of the driving season in the U.S. There was also yesterday’s news of the huge oil reserve found in the Gulf of Mexico. Experts are saying it’s the biggest find in a generation. The well was drilled underneath 7,000 feet of water, and then another 20,000 of seabed.