Here's why Senex Energy Ltd crashed with a bump today

In what can only be described as a bloodbath, companies like Senex Energy Ltd (ASX:SXY) and Santos Ltd (ASX:STO) endured the market's wrath.

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Senex Energy Ltd (ASX: SXY) shareholders are feeling the pain today with their shares having dipped as low as 32.2 cents, compared to yesterday's closing price of 40 cents. That reflects a 19.5% decline.

So What:

The stock's massive fall comes after the Organisation of Petroleum Exporting Countries (OPEC) – a cartel-like group – concluded its meeting in Vienna. While there have been calls for the group to reduce its production ceiling from the current 30 million barrels per day in order to provide support to the falling oil price, OPEC ultimately decided to leave production levels unchanged.

As a result, Brent oil dropped US$5.20 to US$72.55 per barrel while West Texas Intermediate oil dropped below US$70 a barrel. Crude oil has now dropped roughly 40% since mid-June, with experts suggesting prices could still fall much further.

The only real way to describe the aftermath of the meeting was "a bloodbath". In addition to Senex's loss, Santos Ltd (ASX: STO) and Sundance Energy Australia Ltd (ASX: SEA) dropped 10% and 14% respectively, while AWE Limited (ASX: AWE) crumbled 10.7%. Not even the market's bigger players managed to escape the carnage with BHP Billiton Limited (ASX: BHP) and Woodside Petroleum Limited (ASX: WPL) losing 4% and 5.7% as well.

Now What:

The result of the meeting certainly doesn't bode well for Australian resources companies – particularly with the coal and iron ore industries under immense pressure, too. While a number of the companies mentioned above are trading at compelling prices, their true value (as is the case with all miners and resource companies) is derived from the resource which they produce.

That means, with oil prices tipped to fall further in the coming months, the share prices of these companies could be set to fall significantly lower. While I'll be adding the likes of Senex and Santos to my watchlist, I won't be pressing the 'Buy' button until the high level of volatility facing the industry begins to subside.

Motley Fool contributor Ryan Newman does not own shares in any of the companies mentioned.

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