Crude Oil Falls Over 5% This week (USO, UNG, DK, HFC, CVX)
Crude oil slumped for the second straight day on concerns that the United States, Britain and France negotiate releasing emergency stockpiles in hopes of bringing down high fuel prices that have caused economic and political fallout.
Brent crude futures fell $1.46 to $122.70 a barrel, extending losses after falling 1.09 percent the previous session. U.S. crude futures dropped $2.29 to $103.13 a barrel, having falling about 1.80% in the prior session
Other countries including South Korea and Japan are also expected to support the plan as crude oil have damaged the global economy as it soared over 15% since December on supplies fears and the threat of a disruption of Iranian supplies.
Selling in crude oil intensified after Saudi Arabia’s oil minister Ali al-Naimi wrote in a Financial Times opinion piece on Thursday that the giant oil exporter “would like to see a lower price” and that geopolitical concerns, not inadequate supplies, are helping to keep prices high.
Also, the head of the International Energy Agency said Thursday that it is ‘ready to act if market conditions so warrant.” The remarks by IEA Executive Director Maria van der Hoeven came after a meeting of experts from the group’s 28 member-country governments in Paris this week.
Natural gas prices also plunged about 5% after the weekly inventory came ahead of analysts’ estimates. The Energy Information Administration reported an increase of 57 billion cubic feet in the week ended March 23, compared to analysts’ estimates of a rise of 43 bcf to 47 bcf.
United States Oil Fund LP (ETF)(NYSEARCA:USO) lost 2.11% to $39.34 and United States Natural Gas Fund, LP (NYSEARCA:UNG) slumped 4.80% to $16.29.
Delek US Holdings, Inc. (NYSE:DK) shares rose 1.61% to $15.14 after analyst at Credit Suisse upgraded the stock to Outperform and lifted the price target by $2 to $20.50. While, HollyFrontier Corp (NYSE:HFC) was downgraded to Neutral. Shares of HFC slid over 2%.
Chevron Corporation (NYSE:CVX) lost 0.23% to $105.65. The company plans to invest at least $65M to develop shale oil gas exploration in Romania, according to government officials in the nation.