Why Oil Stocks Are Tanking Today

The price of crude oil initially spiked overnight after Iran retaliated against the U.S. for a drone strike that killed one of its key military leaders in Iraq last week. The U.S. oil benchmark, WTI, which spiked 4% after the drone strike to more than $63 a barrel, initially popped another 4% last night to more than $65 a barrel.

However, crude gave back those gains and then some after President Trump said that Iran "appears to be standing down," following a retaliatory attack against U.S. forces in Iraq. That eased fears of an escalating conflict that could have had a major impact on oil prices.

With those concerns dissipating -- taking with them the prospect of higher crude prices -- shares of energy companies tumbled. Leading the decliners were oil and gas producers EQT (NYSE: EQT), Whiting Petroleum (NYSE: WLL), California Resources (NYSE: CRC), Denbury Resources (NYSE: DNR), and Baytex Energy (NYSE: BTE). Each one slumped more than 10% at one point on Wednesday.