It turns out that those temporary inflation fears that pop up from time to time get a reprieve every time the price of oil tanks. The price of crude oil futures has now fallen for the fifth straight trading session. The drop has been more than 7.5% this week, and crude oil was last seen down almost 2% on Friday to about $54.60 per barrel in NYMEX crude. That is down from over $62 per barrel as recently as January 7.
The U.S. and China trade pact should have pushed oil prices higher, as should some disturbances in the Middle East. Instead, the coronavirus from the Wuhan Province in China has spread to the United States and other nations. This has acted to shut down part of the local economy in China and threatens to have a broader impact. One other issue hurting oil prices is that there is expected to be an oversupply scenario in 2020.
The lower crude prices have been rather devastating for the energy sector stocks that have already been reeling from an investor boycott as many investors are seeking ESG (environmental, social and governance) themes with no perceived exposure to fossil fuels.
The SPDR S&P Oil & Gas Exploration & Production ETF (NYSE: XOP) traded down 2.4% at $20.30 on Friday. That’s down from $22.37 a week ago and from $23.70 at the close of 2019.
The Energy Select Sector SPDR Fund (NYSEARCA: XLE) was down 1.3% at $56.55 on Friday. That’s down from $59.12 a week ago and from $60.04 on the last trading day of 2019.
The VanEck Vectors Oil Services ETF (NYSE: OIH) was last seen down 2.7% at $11.63 on Friday morning, compared with $12.67 a week ago and $13.25 at the close of 2019.
Exxon Mobil Corp (NYSE: XOM) was down 0.5% at $66.43 Friday morning, and its 52-week range of $66.05 to $83.49 should show how bad that has been. Investors no longer even care about its 5.2% dividend yield.
Chevron Corp. (NYSE: CVX) was down 1% at $112.00, in a 52-week range of $110.42 to $127.34.
Schlumberger Ltd. (NYSE: SLB) has already reported earnings, and its shares were down 2.1% at $35.65 early Friday. That’s down from $38.77 just last week, and it traded at $37.74 on the last day of 2019.
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