Energy Stocks Fall After Crude Oil Drops 10%

Barry Adams
05 Jul, 2022
New York City

Crude oil plunged 10% below $100 a barrel for the first time in six weeks as recession worries dragged market indexes across the Atlantic by 2%. 

U.S. stocks fell on recession worries and elevated energy prices with the war in Ukraine showing no signs of ending.  

The S&P 500 index declined 1.9% to 3,751.63 and the Nasdaq Composite index dropped 0.9% to 11,029.55.

After a three-day weekend, investors returned with recession anxieties and global economic slowdown worries.

The yield on 10-year U.S. Treasury notes declined 10 basis points to 2.802%.

Energy stocks led the decliners after crude oil prices plunged in the early trading in New York but prices rose in European trading after Norwegian workers went on a strike. 

Futures of crude oil plunged 10% to $98.31 a barrel and natural gas plunged 3.7% to $5.51 a unit.

The crude oil futures plunged below $100 a barrel for the first time since May 11 after spiking as high as $130.50 a barrel in March following Russia's Ukraine invasion and the international price of oil spiked to $140 a barrel.

Natural gas markets are bracing for another delivery shock starting as early next week. 

Russia announced to completely halt all gas deliveries through Nordstream 1  beginning next Monday for 10 days for planned maintenance. 

Moreover, Norwegian gas workers went on a strike over a pay dispute forcing the state controlled Equinor to shut down three oil fields in the North Sea. 

Three gas fields produce the equivalent of 89,000 barrels of oil a day with about 30% of output in natural gas, Equinor said in a press release. 

September Futures of natural gas prices soared as much as 5% or to 172 euros before settling at a lower level of 165 euros per megawatt hour, price feed from the Intercontinental Exchange showed. 

Exxon Mobil Corp declined 4.5% to $83.71, Chevron dropped 4.2% to $140.35, and Occidental Petroleum fell 4.8% to $57.52.

Halliburton, Marathon Oil, Schlumberger, EOG Resources, and ConocoPhillips declined more than 7.0%.  

Yum Brands declined 1.1% to $114.45 and the owner of fast food chains said the company is close to selling its operations in Russia. 

Floor & Decor Holdings Inc gained 5.5% to $68.49 after two institutional investors took additional stake in the retailer.

Restaurant Brand International declined 2.0% to $50.59 on no company specific news and the stock dropped below its 5-day moving average.

Royal Gold, Inc declined 3.3% to $106.56 and Retirement Systems of Alabama increased its stake in the company to 86,123 shares. 

Etsy Inc increased 7.5% to $85.80 and Fifth Third Bancorp said investment funds managed by the bank increased their stake 37.1% to 12,562 shares or $1.56 million at the end of the March quarter. 

 Liquidity Services, Inc  increased 4.4% to $14.71 after Walmart Inc and Target Inc ramped up liquidation of kitchen appliances and outdoor furniture items.