The US-China trade war has significantly affected oil stocks today as oil prices continue to slide Wednesday. Moreover, the United States imminent tariffs over Mexico imports is not helping to turn things around.
That sell-off in the oil market weighed on oil stocks, with several tumbling more than 10% on the month, according to data provided by S&P Global Market Intelligence. Among the notable decliners were Hess (NYSE:HES), Marathon Oil (NYSE:MRO), and Continental Resources (NYSE:CLR).
Furthermore, Brent futures were down $1.77, or 2.9% at $60.20 a barrel. While U.S. West Texas Intermediate was down $2.17, or 4%, at $51.31 a barrel. Moreover, West Texas Intermediate dropped more than 4% after U.S. crude inventories unexpectedly surged.
The decline follows the discovery in mid-April of contaminated Urals crude in the Druzhba pipeline to Europe. Moreover, oil prices have fallen sharply on concerns about slowing demand.
Even with the US Federal Reserve pledging to “act as appropriately” in accordance with on-going trade wars centering the United States, oil prices remain to slide—however, slower than last week.
Front-month Brent crude futures settled at $61.60, still a down of 0.6%. Meanwhile, U.S. West Texas Intermediate down to 0.8% at $53.
On the other hand, oil stock prices have been weighed down regarding concerns about slowing global growth and comments from Russia’s top oil producer that it would oppose extending joint cuts with OPEC until the end of the year.
To prevent oversupply and prop up the market, the Organization of the Petroleum Exporting Countries, together with allies including Russia, has withheld some production since the start of the year.
Oil stock prices are down amidst other global markets going up. European markets—Germany’s DAX, Britain’s FTSE, and Euro STOXX—have all seen significant increases. Moreover, Asian markets—Japan’s Nikkei and Hong Kong’s Hang Seng—have also seen the uptick from the US Federal Reserve’s comment.