2023-05-01 16:35:36 ET
The energy sector ( NYSEARCA: XLE ) is Monday's biggest loser among S&P sectors, -1.1% , weighed down by a pullback in crude oil futures and weakness in Exxon Mobil ( XOM ), which was downgraded to Neutral from Buy at Goldman Sachs.
Crude oil kicked off May with a loss after edging higher in April to snap a string of five straight monthly declines, with front-month Nymex crude ( CL1:COM ) for June delivery closed -1.4% to $75.66/bbl, and July Brent crude ( CO1:COM ) ended -1.2% to $79.31/bbl.
ETFs: ( NYSEARCA: USO ), ( BNO ), ( UCO ), ( SCO ), ( DBO ), ( USL ), ( DRIP ), ( GUSH ), ( USOI ), ( NRGU )
China reignited concerns about a weak economy recovery in the world's biggest crude importer after reporting its official purchasing managers index unexpectedly fell to 49.2 in April from 51.9 in March; a reading below 50 indicates a contraction in activity.
With China on holiday through Wednesday, the oil market's focus will turn to whether major central banks including the Federal Reserve continue tightening rates; the Fed is expected to raise its key lending rate by a quarter percentage point when it completes a two-day policy meeting on Wednesday.
The U.S. dollar rose against a basket of currencies on Monday, making oil more expensive for other currency holders.
Crude has now dropped back below its 50-day moving average, which shows the market's tone remains bearish , said Alex Kuptsikevich, senior market analyst at FxPro, while warning sellers likely will remain cautious because a sustained slide in prices would almost certainly spark a move by OPEC+.
More Seeking Alpha analysis:
- Be Protected, The Next Oil Bull Market Will Be Wild!
- The Energy Sector Is Powering Up, Part 2
- OPEC Was Right, As Weak Demand Wipes Out Oil's Gains From Production Cut
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Crude oil drifts lower, with weak economic data from China in focus