Energy Stocks Decline as Oil Prices Plummet

Shares of energy companies faced a significant decline as oil prices experienced the largest one-day drop in more than a month, despite a notable decrease in crude inventories.

According to Edward Moya, a senior analyst for the Americas at Oanda, "Oil prices are currently plummeting due to the adverse macro backdrop, which is negatively impacting sentiment." Moya also pointed out that the strength of the dollar is further contributing to the decline and is expected to persist as Treasury yields surge due to increased debt sales from the Treasury.

Additionally, the recent downgrade of the U.S. credit rating by Fitch Ratings has further exacerbated the negative sentiment in the overall market.

The Energy Information Administration recently released data showing a sharp decrease in U.S. oil inventories. The data reveals that crude exports have surged to 5.3 million barrels per day. Consequently, commercial crude-oil stockpiles witnessed a significant drop of 17 million barrels last week, reaching 439.8 million barrels. These stockpiles now stand at approximately 1% below the five-year average.