Energy stocks decline as crude prices slip
A sluggish day of trading on Wall Street finished Monday mixed as investors came back from Thanksgiving.
Energy stocks declined the most after a slide in crude oil prices. Materials companies also declined, partly offsetting gains among utilities and industrial stocks.
Retailers posted solid gains amid reports that the holiday shopping season is off to a strong start.
A rising U.S. rig count and continuing uncertainty over OPEC’s strategy to extend supply cuts pushed oil prices lower after a week in which they hit their highest close in more than two years.
Futures slid as much as 2.4 percent in New York after rising 1.6 percent Friday to the most since June 2015. OPEC and Russia, partners in the oil cuts deal, have crafted the outline of an agreement to extend curbs to the end of next year, according to people involved in the discussions. But doubts remain over the size of the reductions after the current accord expires in March, as well as which exit strategy the group will adopt. Meanwhile, drillers targeting crude in the U.S. added at least eight rigs last week.
“What we’re seeing is cold feet heading into the OPEC meeting,” said Ashley Petersen, lead oil market analyst at Stratas Advisors in New York. “After exuberance over three weeks now, investors are getting nervous. That’s going to be the dominant driver regardless of the weekly fundamental data.”
OPEC will meet Thursday in Vienna.
“The consensus is building that Russia may not want to have a situation where they’re ready to restrict supply without any qualifications,” said Bart Melek, global head of commodity strategy at TD Securities in Toronto. “They don’t want to move prices too high to incentivize unconventional producers to produce.”
Benchmark U.S. crude fell 84 cents to settle at $58.11 per barrel.