Fears of oversupply cause plunge of oil to continue, selloff of energy stocks with Oklahoma companies hit hard
Oversupply fears in the U.S. oil market sparked a selloff Wednesday in energy stocks, including those of several Oklahoma companies.
Share prices fell by 5 percent or more for Continental Resources Inc., Chesapeake Energy Corp., SandRidge Energy Inc., WPX Energy Inc. and Unit Corp. At Gulfport Energy Corp., shares fell 4 percent.
Devon Energy shares hit a new 52-week low before recovering a little and ending the trading day down 3 percent.
Among larger multinational energy companies, shares of Chevron Corp., ConocoPhillips and Exxon Mobil Corp. all hit their lowest points in three or four years.
Higher-than-expected oil inventories and new price projections spooked energy investors. Oil supplies typically decline in spring and summer because refiners make more gasoline to meet summer driving demand.
The federal Energy Information Administration said commercial crude inventories rose by 2.6 million barrels last week. Analysts had expected a decline of 1.2 million barrels.
Analyst Thomas Pugh of Capital Economics said the main reason for the increase in inventories was refinery outages for maintenance and other issues. He said oil production continues to drop and gasoline stocks fell more than expected, which shows demand is high.
“The bigger picture is one of strong demand for gasoline and falling oil output, which should give some support to prices over the rest of the year,” Pugh said. He expects oil to finish the year at $50 per barrel..