Crude oil prices tumbled to wipe out the week's prior gains, weighed by a big drop in equities that followed weaker than expected data on China's economic growth as well as a stronger dollar; U.S. WTI settled -2.6% to $51.20/bbl, Brent -2.1% to $60.12/bbl.
"For the time being until the OPEC cuts start kicking in, the market is oversupplied in the short term," says Mitsubishi oil risk manager Tony Nunan, adding "if China is slowing down, that's definitely a concern."
A stronger U.S. dollar plus volatile equity markets have weighed down crude, says Giovanni Staunovo, commodities analyst at UBS Wealth Management, but overall "I would think oil prices are in a position of stabilizing around this level," aided by planned production curbs from OPEC and Russia.
Also, January natural gas futures settled -7.2% to $3.827/MMBtu, suffering its largest weekly drop (-14.7%) for a front month since January 2016.
The "outlook for warmer-than-normal to normal weather through the end of the month" weighed on prices, says James Williams of WTRG Economics. "That, coupled with record high production of gas are the main reasons, despite very low levels of gas in storage for this time of year."
Oil and gas names are broadly lower: XOM -2.3%, CVX -2.2%, COP -2.5%, CHK -9.5%, RRC -8.8%, SWN -8.1%, APA -3.7%, DVN -3.9%, APC -3.4%, CXO -5%, EOG -3.1%, MRO -4.2%, NBL -4.3%, HES -2.3%, SLB -5.1%, HAL -3.3%, BHGE -2.7%, CVRR -10%, SM -9.5%, RIG -7%, ESV -8%, NE -6.8%.
ETFs: USO, UNG, XLE, OIL, UGAZ, UWT, DGAZ, UCO, VDE, XOP, DWT, ERX, OIH, SCO, BNO, BOIL, GASL, FCG, DBO, ERY, DIG, BGR, GUSH, DTO, FENY, USL, IYE, DUG, KOLD, DRIP, IEO, FIF, UNL, GASX, DNO, NDP, PXE, OLO, RYE, PXJ, SZO, CRAK, DCNG, FXN, OLEM, WTIU, DDG, OILK, NANR, OILX, WTID, USOI, USOU, GAZB, USOD, FTXN, JHME, ERYY, ERGF, OILD, OILU, USAI
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