Shares of BHP Billiton Limited (ASX: BHP) have fallen a further 1.1% today in what is their tenth consecutive day in the red. Now trading at $29.45, the stock has lost more than 14% of its value since the beginning of the month in which time more than $14 billion has been wiped from the miner's market value.
While the plummeting iron ore price has played a major role in its descent over the last fortnight, today's fall can mostly be attributed to the crashing oil price. Despite having recovered roughly 34% in February, Brent crude was once again a topic of despair on Friday when it plummeted 4.2% back to US$54 a barrel – its lowest price in six weeks.
Oil is BHP's second most important commodity, right after iron ore. Although the number of oil rigs operating in the United States is diminishing, inventory levels in the US are still at record highs. Unfortunately, that will only exacerbate the market's oversupply issue which will likely continue to push oil prices lower over the course of 2015 – thus impacting BHP Billiton's earnings.
Unsurprisingly, BHP Billiton isn't the only energy producer suffering as a result. Santos Ltd (ASX: STO) and Woodside Petroleum Limited (ASX: WPL) are both down 2.1% and 2% respectively, while Senex Energy Ltd (ASX:SXY) and Oil Search Limited (ASX: OSH) are down 3.9% and 4.1%.
With further falls in oil prices anticipated, investors would be wise to steer well clear of the energy sector altogether, at least until the high level of volatility subsides or share prices become substantially cheaper.
