Shares of U.S. onshore oil driller Centennial Resource Development (NASDAQ: CDEV) fell roughly 9% when trading got underway on July 19. That drop, however, isn't at all shocking given that oil prices opened sharply lower today. What's really important is why.
Over the past week or so, OPEC and its partners have been trying to come to terms over oil production quotas. It was generally agreed that more oil was needed to supply the market, given increasing demand as the world slowly learns to deal with the coronavirus. The problem was that specific members wanted to pump more oil than they had previously been allowed relative to their own history and to peers. Oil prices were volatile while ongoing discussions delayed a final decision.
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Why Centennial Resource Development Fell Sharply at the Open Today