US energy stocks slip as crude drops on Iran deal hopes
XLE•US energy shares fell premarket as Brent crude dropped 4% to $108.85 a barrel and US WTI fell 4.1% to $99.88, after talks between Iranian and Qatari officials raised hopes of easing Middle East supply disruptions.
1. Energy shares decline
Shares of US energy companies fell premarket, tracking lower crude prices. ExxonMobil and Chevron dropped 1.3% and 1.1%, respectively, while oil and gas producers APA Corp, Devon Energy, EOG Resources, Occidental Petroleum and Diamondback Energy fell between 1.5% and 2.2%.
2. Oil prices retreat
Brent crude futures fell 4% to $108.85 a barrel, while US West Texas Intermediate crude declined 4.1% to $99.88. Prices fell as talks between Iranian and Qatari officials on a deal to end the US-Israeli war on Iran raised hopes that Middle East supply disruptions could ease.
3. Analyst sees risk
“We see this as being overdone, as the US is not directly involved and since they are the main protagonist to Iran, it really needs them to agree to a deal before markets can really try to price in a return to normality,” Panmure Liberum analyst Ashley Kelty said. Halliburton and SLB fell 1.1% and 0.9%, respectively; Phillips 66, Marathon Petroleum and Valero Energy declined 0.8%, 1.1% and 1.8%.
