XOM - Why Oil Stocks Are Tumbling Today
Oil prices plummeted today. West Texas Intermediate (WTI), the primary U.S. oil price benchmark, tumbled 9.2% to close at $98.45 a barrel, its lowest price since May 11. Meanwhile, the global oil benchmark, Brent crude oil, slumped 9% to close at $103.29 a barrel, its lowest point since May 10.
That plunge in oil prices sparked a sell-off among oil stocks . Big oil giants Chevron (NYSE: CVX) and ExxonMobil (NYSE: XOM) were down about 5% at one point in the trading day while leading refiner Phillips 66 (NYSE: PSX) was down as much as 7.4% on the day. Here's a look at what's causing the downdraft in the oil patch and what it means for these oil stocks.
Oil prices plunged following the Independence Day holiday, fueled by growing concerns about demand and a surging U.S. dollar compared to other currencies. Worries are rising that the global economy could enter a recession, driven by higher interest rates to combat inflation. That would likely impact gasoline, diesel, and jet fuel demand as consumers pull back on discretionary spending, including travel. Meanwhile, a rising U.S. dollar is making buying oil in foreign currencies more expensive, which could weigh on demand.
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Why Oil Stocks Are Tumbling Today