Sliding oil prices result in $1 trillion loss by oil and gas sector around the globe

Those tumbling oil prices of the past 40 days have resulted in a $1 trillion loss by the oil and gas sector.

Crude prices in New York commodity markets slid more than 25 percent during the 40-days when prices began falling in early October. Last week ended with a re cord 12th straight day of oil price declines.

Prices went from a peak of $76 a barrel to less than $56. As a result, energy stocks included in the S and P 500 Index shed nearly $240 billion in value during the 40-day period.

The Houston Chronicle reported that Exxon Mobil shareholders lost nearly $35 billion on Wall Street. And the Norwegian research firm Rystad Energy estimated the losses by oil and gas firms around the world totaled $1 trillion in asset values.

“It’s certainly surprising and unexpected how quickly things shifted,” said Dan Pratt, executive director of upstream energy for the research firm IHS Markit told the Chronicle. “Energy is a bit out of favor. It’s hard to see where people are getting excited about oil and gas.”

Stock market values matter greatly to energy firms, their investors and their employees, affecting companies’ ability to expand, hire and borrow money, which still drives the Greater Houston economy. For many tens of thousands of energy workers in the region, falling stock prices not only affect their job security, but also, for the many who hold their employers’ stock, the value of their portfolios and retirement plans, and confidence to spend on homes, autos and other goods and services

The excitement that followed the run-up of oil prices earlier in the fall has recently morphed into fear. This new stretch of losses, both in crude and stock prices, is the worst hit to the energy sector since the last oil bust, when crude collapsed from more than $100 a barrel in 2014 down to a low of about $26 in early 2016.