Crude oil tumbles as European Union weighs watered-down price cap
SlavkoSereda/iStock via Getty Images

Energy stocks dominate the list of the S&P 500's largest losers Wednesday, following reports that the European Union is weighing a price cap on Russian seaborne oil in the $65-$70/bbl range, which would be well above Russia's cost of production and higher than some countries have been paying for oil.
Talks on a Russian oil price cap have been considered in a bullish light for crude, but a $65-$70/bbl cap may keep the country's supplies flowing into the global market.
Front-month WTI crude (CL1:COM) for January delivery -4.7% to $77.11/bbl, and January Brent crude (CO1:COM) -4.4% to $84.45/bbl.
WTI crude now trades below its 50-day, 100-day and 200-day moving averages for the first time since the early 2020 selloff caused by the COVID-19 pandemic.
Spreads between front-month and second-month WTI crude flipped into contango for the second time in a week.
ETFs: (NYSEARCA:USO), (UCO), (BNO), (SCO), (DBO), (USL), (USOI), (NRGU), (NYSEARCA:XLE), (XOP), (VDE), (OIH), (CRAK), (DRIP), (GUSH)
Twelve of the day's 15 biggest decliners are in the energy sector: Schlumberger (SLB) -4.3%, Hess (HES) -4.2%, Occidental Petroleum (OXY) -3.5%, Halliburton (HAL) -3.5%, Conoco Phillips (COP) -2.9%, Baker Hughes (BKR) -2.8%, Diamondback Energy (FANG) -2.8%, APA Corp. (APA) -2.8%, Valero Energy (VLO) -2.7%, Marathon Oil (MRO) -2.6%, Devon Energy (DVN) -2.5%, Phillips 66 (PSX) -2.3%.
The price cap conjecture adds to demand concerns related to top crude oil importer China, where COVID-19 cases are surging again, with Shanghai the latest major city to tighten its rules.
Traders paid little heed to a bullish U.S. report showing supplies at the Cushing, Okla., storage hub falling to a two-month low.