U.S. oil prices and energy stocks, including ExxonMobil (XOM) along with Warren Buffett-backed Chevron (CVX) and Occidental Petroleum (OXY), fell early Wednesday ahead of the Energy Information Administration’s (EIA) weekly petroleum report.
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West Texas Intermediate (WTI) oil prices slipped 2.4% to $86.82 per barrel Wednesday, after hitting $93 per barrel last week.
U.S. crude inventories fell by about 4.2 million barrels last week, the American Petroleum Institute said Tuesday night, far exceeding forecasts for a 92,000 barrel draw.
The EIA releases its report on petroleum crude inventories and gasoline Wednesday amid signs consumer demand is weakening.
On Sept. 27, EIA data showed gasoline demand rose slightly from 8.41 to 8.62 million barrels per day. But that was below last year’s demand of 8.83 million bpd during the same week in September 2022.
The average price of gasoline at the pump was $3.78 per gallon Wednesday, according to AAA data. That’s down less than 1% vs. last year. Retail gas prices are starting to cool after rising significantly in late summer.
Gasoline futures fell nearly 3% Wednesday, now at the lowest level since early January. That suggests further declines at the pump in the coming weeks.
Meanwhile, the OPEC Joint Ministerial Monitoring Committee also met for its regular market monitoring meeting. Saudi Arabia reaffirmed Wednesday it will maintain its voluntary production cut of 1 million barrels per day until the end of 2023.
ExxonMobil Stock, Energy Stocks Follow Oil Prices
XOM along with other energy stocks angled lower early Wednesday during market trade.
Energy stocks have followed oil prices, rallying since June, after a fall off from 2022 highs driven by Russia’s Ukraine invasion. U.S. oil producers and the Saudi Arabia-led Organization of Petroleum Exporting Countries and its partners have kept global oil supplies tight. But the outlook for demand remains uncertain, with China’s economy struggling, and the outcome of the U.S. battle vs. inflation yet to be determined.
XOM dropped 3% to 112.22 Wednesday. On Tuesday, ExxonMobil stock edged up 0.2% to 115.83 but after tumbling below a buy point over the prior three sessions. Chevron stock also fell 2.9% Wednesday after gaining 0.2% to 166.93 Tuesday.
Fellow Warren Buffett stock, Occidental Petroleum slipped 4% Wednesday. U.K. oil major BP (BP) sank 3.5% while Shell (SHEL) lost 2.4%.
Refinery stocks are struggling as the “crack spread” between crude and gasoline prices narrows. Valero Energy (VLO) fell 3.7% Wednesday. On Tuesday, VLO stock sank 3.3% to 133.58, breaking below the 50-day line as part of a three-day sell-off.
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