COM - Crude oil reverses all gains that followed Saudi-led production cuts
2023-04-20 12:42:53 ET
Energy ( NYSEARCA: XLE ) is Thursday's worst performing S&P stock sector, -1.4% , pressured by weak crude oil prices that have erased all gains made since the Saudi Arabia-led production cuts announced at the beginning of April.
The U.S. economy has stalled in recent weeks, the Federal Reserve said in its Beige Book survey , weighing on the market's outlook for energy demand, and the dollar has been rising, another headwind for commodities.
Concerns over slowing U.S. growth eclipsed a report showing U.S. crude stockpiles fell 4.58M barrels last week .
Nymex crude oil for May delivery ( CL1:COM ) currently -2.5% to $77.20/bbl, and June Brent crude ( CO1:COM ) -2.5% to $81.02/bbl.
Among the day's noteworthy decliners: ( APA ) -2.3% , ( COP ) -2.2% , ( KMI ) -2.2% , ( MRO ) -2.1% .
ETFs: ( XLE ), ( XOP ), ( VDE ), ( OIH ), ( USO ), ( BNO ), ( UCO ), ( DBO ), ( SCO ), ( USL ), ( DRIP ), ( GUSH ), ( USOI ), ( NRGU )
The energy sector has trimmed its gain so far in April to +2.8% while the S&P 500 remains +0.6% month-to-date.
The International Energy Agency has said the OPEC+ cuts will drive a sharp deficit, but prices suggest "the market doesn't quite seem to buy into this outlook," SEB chief commodity analyst Bjarne Schieldrop said.
" Investors are cautious about buying into the bull story based on OPEC cuts alone," Schieldrop told MarketWatch , pointing to signs of weak diesel demand and lackluster manufacturing data.
OPEC's production cuts risk exacerbating an oil supply deficit expected in this year's H2 and further weighing on the global economy, the IEA said recently .
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Crude oil reverses all gains that followed Saudi-led production cuts