Crude oil producers took it on the chin again Thursday as futures prices in the U.S. and overseas took their biggest drop in more than six weeks.
West Texas Intermediate crude for July deliver fell $3.26 or 8.2% at $36.34 a barrel in trading on the New York Mercantile Exchange, this after rising 1.7% and marking the highest settlement since March 6 on Wednesday.
The decline marked the sharpest one-day fall since April 27 and the settlement was the lowest since June 1, according to Dow Jones Market Data.
Brent crude for August delivery fell $3.18 or 7.6% at $38.55 a barrel on ICE Futures Europe. Prices were at their lowest finish since June 1 and the drop in prices represented Brent’s steepest since April 21.
The US price drop was attributed to a weekly increase in inventories, climbing cases of coronavirus and a gloomy economic outlook from the Federal Reserve.
“In less than a week, the supply and demand fundamentals both turned bearish for oil markets,” said Edward Moya, senior market analyst at Oanda according to Market Watch.
“Supply glut overhang and diminishing crude demand expectations are sinking oil prices sharply,” he said in a market update. “Second wave coronavirus risks [are] crushing hopes for a steady global economic recovery that was spearheading prospects of improving crude demand.”
Also, following Wednesday downbeat economic outlook by the Fed, “energy traders are worried permanent damage to the economy along with a second wave of the coronavirus will cripple prospects for a strong second half of the year,” said Moya. “The supply glut issue to is not going away anytime soon, as U.S. crude stockpiles rise to a record high.”
The fall in crude oil prices also carried out to some Oklahoma oil and gas companies or those with a track-record of production in the state. ONEOK saw the largest loss of those companies, recording a 16% or $6.65 decline in the value of shares which settled at $35.33.
Marathon Oil took a 12% drop or 85 cents a share and finished the day at $6.26. SandRidge Energy shares dropped 19 cents or 11% before ending the day at $1.58 while Devon Energy suffered an 11% decline or $1.47 per share, ending at $12.20.
Chesapeake Energy rebounded 83 cents or 5% from this week’s declines and ended the day at $17.64 a share. ConocoPhillips fell 8% or $3.79 finishing the day at $42.12 per share.
EOG Resources fell 8% or $4.49 a share and settled at $51.15. Phillips 66 shares dropped 11% or $9.33 and ended Thursday’s trading at $75. American Electric Power fell $3.61 or 4.23% a share before finishing at $81.76.