Energy was this week’s biggest S&P sector loser, as U.S. crude oil slid more than 7% to its lowest since January, succumbing to rising recession fears that pressured financial markets while contributing to further gains by the U.S. dollar.
The WTI and Brent benchmarks both posted their fourth straight week of decliners, the first time that has happened all year: The front-month WTI Nymex contract (CL1:COM) for November delivery settled -7.1% to $78.74/bbl, the lowest since January 10, while November Brent crude (CO1:COM) finished -5.7% for the week at $86.15/bbl, its weakest since January 14.
Risk averse sentiment also hit U.S. natural gas futures (NG1:COM), with the front-month October contract ending the week -12% to $6.828/MMBtu.
“Geopolitical tensions in monstrous proportions, inflation at a multi-decade high and the dollar surging unabated are all certain to cause demand destruction for oil,” Velandera Energy Partners’ Manish Raj told MarketWatch.
But the market remains tight, Oanda’s Craig Erlam said, and OPEC and its allies have signaled a willingness to restrict supply further even as they fail to deliver on current production quotas.
Despite the week’s 10% shellacking, the Energy Select Sector SPDR ETF (NYSEARCA:XLE) still sports a 27% YTD gain.
Top 5 gainers in energy and natural resources during the past 5 days: (SLNG) +39.1%, (LITM) +23.2%, (PBF) +5.5%, (CIG) +4.3%, (EBR) +4.2%.
Top 15 decliners in energy and natural resources during the past 5 days: (TELL) -40.7%, (IREN) -27.4%, (KOS) -24.5%, (NBR) -24.2%, (BPT) -24.2%, (POLA) -24.1%, (SBOW) -23.6%, (TALO) -22.7%, (NINE) -22.7%, (PTEN) -22.3%, (REPX) -22.2%, (RIG) -22.1%, (HUSA) -21.9%, (WTI) -21.7%, (TUSK) -21.5%.