Energy stocks slammed as oil plunges to lowest since December 2021
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The energy sector (NYSEARCA:XLE) suffered the largest decline among the S&P's 11 industry sectors Wednesday, with crude oil and natural gas prices dropping sharply as problems at Credit Suisse reignited a wave of risk-off selling.
Six of the 10 biggest losers on the S&P 500 were in the oil and gas group: Halliburton (HAL) -9%, Marathon Oil (MRO) -8.5%, Devon Energy (DVN) -8.3%, Schlumberger (SLB) -8.2%, APA Corp. (APA) -8%, Diamondback Energy (FANG) -7.4%.
Front-month Nymex crude (CL1:COM) for April delivery finished -5.2% to $67.61/bbl, clsoing below $70 for the first time since December 2021 and capping a 12% drop during the past three sessions; front-month May Brent crude (CO1:COM) closed -4.8% to $73.69/bbl.
Also, U.S. front-motnh Nymex natural gas (NG1:COM) for April delivery ended -5.2% to $2.439/MMBtu.
ETFs: (XLE), (NYSEARCA:XOP), (VDE), (OIH), (USO), (BNO), (UCO), (SCO), (DBO), (UNG), (UGAZF), (BOIL), (KOLD), (UNL)
"Oil is getting destroyed, with big macro looking straight into the U.S. recession vortex and energy traders drawing straight-line parallels to prior bank sector-driven recessions, especially the 2008 financial crisis," Stephen Innes of SPI Asset Management said in a note.
The lack of a "slingshot recovery" in China economic data following the lifting of COVID restrictions and rising worries over global banking "has opened the trap door for the oil market today and could be the nail in the coffin for the oil market rebound in Q1," Innes said.
The Energy Information Administration reported Wednesday that U.S. crude inventories rose 1.6M barrels last week.