At roughly 2 p.m. EDT on Thursday, shares of U.S exploration and production company Centennial Resource Development (NASDAQ: CDEV) had hit a nadir of around 16% for the week. Following a little behind was energy services name Oceaneering International (NYSE: OII) , which was down as much as 12% at its worst point in the week. But "beating" them both on the downside was solar panel maker SunPower (NASDAQ: SPWR) . The stock's low for the week was a decline of just over 17%. There is a lot to take in here.
Starting with oil, the big story in the energy sector this week has been the difficult negotiations at OPEC. The industry group has been talking since last week about increasing output in an attempt to keep supply and demand in check. Members broadly agree that an output increase is needed, given the continued improvement in demand following the 2020 pandemic-driven economic downturn. However, some within the group want to see their specific production levels increased relative to their previous levels and peers. While an agreement looks close to being hammered out, the internal tension isn't likely to be over.
This is notable for Centennial and Oceaneering. The last time OPEC had a falling out in early 2020, production was ramped up in a wild grab for market share. That, in conjunction with the pandemic, led to a dramatic plunge in oil prices . So the uncertainty surrounding OPEC's production levels today has investors jittery and oil prices have been volatile. As a driller, Centennial's top and bottom lines are directly impacted by energy price moves, so weak energy prices of late have pushed the stock lower. Oceaneering could see a second-order impact, with the prospect of lower oil prices leading to fears of weak demand for the company's services.
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Why Centennial Resource Development, Oceaneering International, and SunPower All Lost Ground This Week