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U.S. crude oil futures plunged 10% this week, as the combination of rising COVID cases in China and aggressive tightening by central banks in the U.S. and elsewhere radically shifted market sentiment, erasing all the gains amassed during the past month when OPEC+ announced its surprise 2M bbl/day production cut.
Front-month Nymex crude oil (CL1:COM) for December delivery closed the week -9.9% to $80.08/bbl, the lowest since September 30 after the largest one-week percentage decline since April, while January Brent crude (CO1:COM) ended -8.7% at $87.62/bbl.
Front-month spreads on WTI crude flipped into contango on Friday for the first time since 2021, which could show that demand is falling faster than OPEC+ has cut production.
Some traders say the flip into contango was due to additional supply caused by reduced capacity of Shell’s (NYSE:SHEL) Zydeco pipeline, which connects several pipelines in Houston and Port Neches in Texas; the disruption is causing shale barrels to move to Cushing, Okla., for storage, which affects near term WTI contracts.
Shell (SHEL) said Zydeco will remain at reduced capacity until mid to late December.
Energy (NYSEARCA:XLE) was one of the week’s worst performing stock market sectors, -1.6%, snapping a winning streak of four straight weeks.
Top 5 gainers in energy and natural resources during the past 5 days: (PEGY) +28.4%, (HTOO) +18.8%, (HNRG) +15%, (GNE) +12.7%, (RGCO) +11.5%.
Top 10 decliners in energy and natural resources during the past 5 days: (TUSK) -23.1%, (AMTX) -18.9%, (SQM) -18.7%, (AQN) -17.5%, (AMPS) -17.3%, (PPTA) -16.4%, (NEXT) -15.9%, (CLNE) -15.2%, (SGML) -15.2%, (ALB) -14.8%.
Source: Barchart.com
Image and article originally from seekingalpha.com. Read the original article here.