2023-05-25 19:55:39 ET
Energy ( NYSEARCA: XLE ) sank to the bottom the S&P sector leaderboard on Thursday, -1.8% , with crude oil falling sharply after Russia downplayed the likelihood of further OPEC+ production cuts at the cartel's June 3-4 meeting.
Russian Deputy Prime Minister Alexander Novak reportedly told the Izvestia newspaper that he did not expect any additional measures would be announced.
As a result, crude futures fell for the first time after three straight daily gains, helped in part by remarks from Saudi Arabia's top energy official that were taken as a signal that OPEC and its allies could move to further reduce output.
"The Saudis were trying to talk up oil prices and dangle a threat of more production cuts, but it looks like Russia won't be on board for additional cuts," Oanda analyst Edward Moya said.
Front-month Nymex crude ( CL1:COM ) for July delivery settled -3.4% to $71.83/bbl, and July Brent crude ( CO1:COM ) closed -2.7% to $76.26/bbl.
ETFs: ( NYSEARCA: USO ), ( BNO ), ( UCO ), ( SCO ), ( DBO ), ( USL ), ( DRIP ), ( GUSH ), ( USOI ), ( NRGU )
The S&P energy sector is now the weakest performer of the month, -7.5% since the end of April.
Thursday's weaker performers in the group included Devon Energy ( DVN ) -3.6% , Hess ( HES ) -3% , Marathon Oil ( MRO ) -2.8% , EOG Resources ( EOG ) -2.5% , Diamondback Energy ( FANG ) -2.5% , Baker Hughes ( BKR ) -2.5% .
Crude oil will reclaim the $80/bbl level in this year's H2 and could continue rising toward $90 due to a deepening supply deficit caused by OPEC's production cuts and the lack of response from U.S. shale, Bank of America analysts forecast last week .
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Oil slides after three straight gains as Russia downplays more OPEC+ cuts