Chaos within OPEC is once again rocking oil prices — and rattling the stock market in the process.
The Dow dropped more than 200 points and the S&P 500 slid 1.3% on Wednesday morning as oil prices plunged another 4% to $30.60 a barrel.
The latest collapse in oil prices comes after Saudi Arabia ruled out the idea of cutting production due to deep distrust among oil producing nations. Iran dashed hopes global producers would come to an agreement on freezing output at their already-high levels. The country’s oil minister blasted the Saudi-led idea of production freeze as a “joke” on Tuesday.
All of this is bad news for the stock market, which is obsessed with the downsides of cheap oil. So far in 2016, oil and the S&P 500 have moved together 87% of the time, a CNNMoney analysis found.
Just look at last week. The Dow soared 418 points — its best performance of 2016 — after oil prices climbed back above $33.50 a barrel. Now that oil is slumping again, so are energy company stocks like Chevron, Transocean and Hess.
–CNNMoney’s Heather Long contributed to this report