The oil plummet is rippling beyond the energy sector and into other areas of the economy, according to
Yahoo's Jeff Macke.
Macke noted construction equipment giant Caterpillar was downgraded this week to "underweight" at JPMorgan Chase, in part because of its close ties to the oil and gas industry.
Shares of Caterpillar slumped under pressure as a result.
"It's not the news it's the reaction. Caterpillar stock fell almost 6 percent, and that is what you need to pay attention to as an investor. You can't have crude fall 50 percent without other problems rearing their ugly head," said Macke, a Yahoo Finance host.
He cautioned Caterpillar is not alone in being exposed to fears of an oil plunge contagion.
"We've got this sub industry of drilling and energy exploration in the states, really based on oil. Everyone is reworking their models right now. . . . I think that we are putting pressure on the financial system. There's no sign of a real bottom yet and that's scary for equities," Macke cautioned.
"The idea that you can just hide in equities because it is going to be super good because you're paying less at the pump is a little finger-painty."
Forbes columnist Christopher Helman said the U.S. should not hold its breath thinking OPEC will come to the rescue by cutting production to drive up prices.
It's not going to happen, according to Helman, who predicted it will be up to American producers to cut supplies to stop the oil crash.
"Because once this era of oil price volatility is over and the market returns to a new normalcy it will be American tight oil producers that assume the role of 'swing producers,' bringing stability to the market," he predicted.
Oil prices are headed as low as $20 per barrel from their current prices around $48, he predicts, before the carnage abates.
"But eventually, the gig will be up. Rigs are already being mothballed, hedges will roll off, supplies will tighten, WTI discounts to Brent will shrink, bankruptcies and defaults and consolidations will occur, and the price of oil will go back up again."
USA Today also reported on a ripple effect for other industries caused by energy's downfall. It noted U.S. Steel said this week it plans to eliminate 750 workers in two plants that make steel tubes used largely in the oil industry.
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