VAL - Why Oil Stocks Are Tanking Today
Crude oil prices tumbled on Monday. Both WTI (the U.S. benchmark) and Brent (the global benchmark) fell about 4.5% by 10:45 a.m. EST to $51 and $55.75 a barrel, respectively. That slump in the oil market weighed heavily on energy stocks, especially shares of financially weaker companies. Leading the decliners were Valaris (NYSE: VAL), Nabors Industries (NYSE: NBR), Kosmos Energy (NYSE: KOS), Oasis Petroleum (NYSE: OAS), and Parsley Energy (NYSE: PE). Each one slumped by around 10% at one point in the trading day.
The number of coronavirus infections outside of China spiked over the weekend in places like Iran, Italy, South Korea, and Japan. That has increased the risks of it impacting global economic growth, which could dent demand for oil. That prospect for lower consumption added more weight to crude prices, which have already been under pressure due to an overabundance of supply.
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