COM - Energy stocks crushed along with crude oil as economic outlook sours

2023-05-02 15:45:14 ET

Crude oil futures closed sharply lower Tuesday, with U.S. prices settling at their lowest level in more than five weeks, following disappointing data from China that revealed a drop in manufacturing activity and regional bank turbulence that has unsettled the outlook in the U.S.

June WTI crude ( CL1:COM ) settled -5.3% to $71.66/bbl, and July Brent crude ( CO1:COM ) closed -5% to $75.32, both the lowest finishes for front-month contracts since March 24, while June Nymex natural gas ( NG1:COM ) closed -4.5% to $2.214/MMBtu, and June Nymex RBOB gasoline ( XB1:COM ) finished -4.5% to $2.4357/gal.

ETFs: ( NYSEARCA: USO ), ( BNO ), ( UCO ), ( SCO ), ( DBO ), ( USL ), ( DRIP ), ( GUSH ), ( USOI ), ( NRGU ), ( UNG ), ( UGAZF ), ( BOIL ), ( KOLD ), ( UNL ), ( FCG ), ( UGA )

The energy sector ( NYSEARCA: XLE ) is the day's worst performer, -4.1% , lowering the group's YTD decline to 7.7%.

Providers of oilfield equipment and services ( OIH ) are hit especially hard, with Halliburton ( NYSE: HAL ) -7.4% , Schlumberger ( SLB ) -6.2% , NOV Inc. ( NOV ) -6.1% , Baker Hughes ( BKR ) -5.2% and TechnipFMC ( FTI ) -4.5% .

Among other oil and gas names: APA Corp. ( APA ) -6.6% , EOG Resources ( EOG ) -5.3% , Marathon Oil ( MRO ) -5.1% , Devon Energy ( DVN ) -4.5% , Chevron ( CVX ) -4% , Exxon Mobil ( XOM ) -3.3% .

BP ( BP ) -7.7% after reporting a strong Q1 but lowering the pace of its stock buybacks .

"The post-OPEC+ gains have now been wiped out, which suggests traders are now of the belief that the economic outlook has deteriorated to the extent that the output cut won't create the deficit that was feared when some were calling for $100 oil," Oanda analyst Craig Erlam said.

More Seeking Alpha analysis:

• Energy Focused ETFs Falter As Oil Drops 5%
• OPEC Was Right, As Weeak Demand Wipes Out Oil's Gains From Production Cut
• Be Protected, The Next Oil Bull Market Will Be Wild

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