WTI crude oil plunges back below $100/bbl on Tuesday, as fears of a global economic slowdown and a strong dollar continue to weigh on stocks and commodities.
Additionally, Shanghai and some other Chinese cities are enacting fresh COVID-19 restrictions from business shutdowns to broader lockdowns in an effort to rein in new infections from the highly infectious BA.5.2.1 subvariant of the virus.
WTI crude (CL1:COM) for August delivery -6.8% at $96.95/bbl, and September Brent (CO1:COM) -6.5% at $100.11/bbl.
Energy (NYSEARCA:XLE) is Tuesday’s worst performing sector in the S&P 500, -2.8%, led by Hess (HES) -5.1%, Occidental Petroleum (OXY) -5% and NOV Inc. (NOV) -5%.
President Biden will make the case for higher oil production from OPEC when he meets Gulf leaders in Saudi Arabia this week, but “little hope is being assigned to Biden’s visit to Saudi Arabia unlocking more production from them or the UAE,” OANDA analyst Jeffrey Halley said.
ETFs: (NYSEARCA:USO), (UCO), (SCO), (USL), (DBO), (USOI), (NRGU), (XOP), (VDE), (OIH), (IEO), (CRAK)
The S&P 500 Energy Sector index (XLE) has lost 23% since June 1, and energy shares may be losing their status as the place where investors can find refuge from this year’s stock market carnage.
