XOM, CVX, MRO, SLB, OXY: Why Are Oil Inventories Falling Today?
Oil prices fell for the second day in a row, leaving many oil stocks lower again on Tuesday, with West Texas Intermediate (WTI) and Brent crude falling below $100 a barrel. Yesterday, the Energy Information Administration predicted that US shale oil production would grow at the fastest pace next month in more than two years. The agency makes predictions about the production of the seven largest shale sites in the United States
Also yesterday, China announced that its manufacturing hub, Shenzhen, would be closed due to the further spread of Covid-19. The news, along with lockdowns in other Chinese cities in recent days, has investors betting that Chinese demand for oil could fall sharply.
Why are oil stocks down today?
Additionally, there has been speculation that Saudi Arabia and the United Arab Emirates may react to rising prices by pumping in more oil. According to reports, British Prime Minister Boris Johnson will visit the two countries tomorrow to convince them to increase their oil production.
Finally, signs of progress in the negotiations between Russia and Ukraine could put downward pressure on oil prices. In particular, on March 13, “Ukrainian presidential negotiator and adviser Mykhailo Podolyak” reportedly said in an online video that “Russia is already starting to talk constructively. I think we will literally get results in days.
Among the major oil stocks down at least 3% today are Exxon Mobil (NYSE:XOM), Chevron (NYSE:CLC), Marathon oil (NYSE:RRM), Schlumberger (NYSE:SLB) and western oil (NYSE:OXY).
As of the date of publication, Larry Ramer had no position (directly or indirectly) in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to InvestorPlace.com Publication guidelines.