Energy was the biggest loser in the S&P this week, as U.S. crude fell more than 7% to its lowest since January, succumbing to growing recession fears weighing on financial markets. while contributing to the increase of the US dollar.
WTI and Brent benchmarks both posted a fourth straight weekly decline, the first in an entire year: WTI Nymex contract delivered last month (CL1: COM) for November delivery settled -7.1% to $78.74/barrel, the lowest since January 10, while November Brent crude oil (CO1: COM) complete -5.7% for the week at $86.15/bbl, the lowest since Jan. 14.
Risk aversion also affects US natural gas contracts (NG1: COM), with a contract month prior to October ending in the week -twelfth% to $6,828/MMBtu.
“Geopolitical tensions at dire proportions, inflation at a multi-decade high and a strong dollar unabated are all inevitably cause demand destruction for oil“, Manish Raj of Velandera Energy Partners told MarketWatch.
Oanda’s Craig Erlam said the market is still tight and OPEC and its allies have signaled their willingness to limit supply further even if they fail to meet their current production quotas.
Despite 10% support for the week, Energy Sector SPDR ETF (NYSEARCA:XLE) still achieved an increase of 27% compared to the beginning of the year.
The 15 biggest declines in energy and natural resources in the past 5 days: (TELL) -40.7%(IREN) -27.4%(KOS) -24.5%(NBR) -24.2%(BPT) -24.2%(POLA) -24.1%(SBOW) -23.6%(TALO) -22.7%(RIPE) -22.7%(PTEN) -22.3%(REPX) -22.2%(OIL-SHORE) -22.1%(HUSA) -21.9%(WTI) -21.7%(FANG) -21.5%.