Why Oil Stocks Are Getting Pummeled Today
Recession worries plunged the stock market into a sea of red today. That sell-off, along with some worrisome data, sent crude prices on a downward spiral, which put pressure on most oil stocks. Several tumbled on the day, led by SM Energy (NYSE: SM), Noble (NYSE: NE), and California Resources (NYSE: CRC), which all slumped more than 11% at 2:30 p.m. EDT on Wednesday.
Crude prices fell more than 3% on the day. Two factors weighed on oil prices. First, oil storage levels in the U.S. unexpectedly increased by 1.6 million barrels, according to the latest government report. That marked the second straight rise in oil inventories, which surprised the market since it anticipated that storage levels would decline by 2.8 million barrels. This data suggests that demand isn't as strong as expected, which could be due to a slowing global economy.
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Source Fool.com
