Oil Futures Trading Plummets: Investors Ditching Oil Stocks

"Concerns over the strength of the global recovery, combined with a stronger dollar, have placed downward pressure on oil," according to analysts at Action Economics. Crude Oil Futures continue to plummet, today falling below $72 a barrel. The cause, mounting worry and concern about the global recovery pace.

In morning trading, The Dow Jones Industrial Average dropped over 100 points. While broader Indexes also saw a decline of over 1 percent. Investors are ditching oil stocks and going back into the safety of the Treasury bond market. The looming concern is that because of the slow recovery, which could push the economy back into a recession.

The Dow Jones slid 103.83 or 1 percent to 10,074.06. While The Standard and Poor 500 Index also declined to 11.60 or 1.1. percent to 1,055.76. The Nasdaq Composite Index dropped 25.52 or 1.2 percent bringing it to 1,786.79. For every one stock that rose on the New York Stock exchange, 10 fell.

Phil Flynn, PFG Best analyst said, "Just when it seems oil is going to rally on strong economic optimism, it gets crushed with the realty of gluttonous supply. When it gets ready to fall apart, like in the emergence of the latest chapter in the economic crisis, some central bank supports it with a flood of printed money."

Stock Prices, Crude Oil Futures: Chevron (NYSE:CVX), Halliburton (NYSE:HAL), Exxon (NYSE:XOM),

Stock prices in energy see a dramatic decline in Chevron (NYSE:CVX), Halliburton (NYSE:HAL), and Exxon (NYSE:XOM). This drop was seen after the White House stated they planned to immediately appeal a decision made by a judge in Louisiana to stop the moratorium banning any new drilling for six months.

Exxon Mobil dropped 1.9 percent to 61.94. While Chevron seen a decline of 2.3 percent taking them to 74. Then there Halliburton which slid 3.9 percent to 25.99.

Ben Halliburton, chief investment officer at Tradition Capital Management said, "it's a big negative for the industry if the moratorium is not lifted. Clearly, the companies impacted are going to have negative revisions on their earnings and their cash flows if they're involved in the deepwater Gulf."

The Nasdaq dropped 1.19 percent to 2261.80. While the Standard and Poors 500 saw a decline of 1.61 percent to 1095.31. All sectors of the S&P ended in the red lead by energy. The Dow Jones fell 1.43 percent to 10293.52, there largest one day loss since June 4th.

BP (NYSE:BP) Credit, Third Downgrade By Moody's

BP's (NYSE:BP) credit rating has been hit with its third downgrade from the rating agency Moody's Investors Service on Friday. They said, "Moody's updated assessment is that the spill will have a sustained negative impact on the groups free cash flow generation and overall financial profile for a number of years." BP dropped from Aa2 to A2, June 3 decline was from Aa1 to Aa2.

Standard and Poors 500 also lowered their rating of BP on Thursday. This is the second downgrade they have given BP in a month from an A to A-1. On Tuesday, Fitch also dropped their rating six notches of BP's long term debt to just above junk level.

David Staples, managing director of Moody's Corporate finance group said," the oil leak has to stop. As long as the oil leak continues, the costs continue to mount and the exposure to litigation continues. BP declined to comment on the downgrade. Staples did say that BP would remain on close review for further future downgrades.

Bryon Grote, BP's Chief Financial officer did say on Wednesday that he hoped the deal struck with the White House would help reinforce their prior rating of AA from Moody's.