The benchmark crude WTI plunged 5.3% to settle at $71.66 per barrel in today’s session. Sentiment remains weak ahead of the crucial U.S. Fed meeting tomorrow. Investors are currently pricing in a stronger U.S. dollar, which would have a negative impact on oil prices. This is the result of a widely anticipated rate hike by the central bank that would make the U.S. dollar more attractive relative to other currencies.
Additionally, a tepid economic recovery in China and worries about the U.S. defaulting on its bonds continue to add to the uncertainty. Indeed, manufacturing activity in China saw an unexpected decline. Since China is the largest importer of oil, this will have a material impact on its price. Meanwhile, Treasury Secretary Janet Yellen said the government could run out of money by June.
Furthermore, natural gas fell 4.5% to close at $2.214 per MMBtu as year-to-date losses have accumulated to more than 44%. In addition, the United States Oil Fund ETF (USO) is sitting on a slight loss for 2023 following today’s drop.
Here is a list of energy stocks that can be influenced by the latest developments in the energy markets.
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