While stocks have been recovered mostly from April 2 “Liberation Day”, oil prices have not done so.
The price of oil struggling was a serious download month for most oil and gas stocks.
Saudi Arabia is threatening to increase supply, even as demand for demand.
Oil and Gas Actions to Large Oil Chevron(NYSE: CVX), What is the corporation(NASDAQ: WHAT)and provider of oil field services Halliburton(NYSE: HAL) fell strongly in April, by 18.7%, 26.1%and 21.9%, respectively, according to data from S&P Global Market Intelligence.
Of the three actions, only Halliburton reported earnings during the month. But this was largely unimportant in the decrease in prices, as the decrease in the board sector occurred in the highest monthly decrease in oil prices since November 2021.
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The price of Brent and WTI Oil fell 15% and 18%, respectively, in April, according to CNBC. This is actually the greatest decrease in one month of oil since November 2021. Thus, it is not uncommon for these three stocks, to be lifted to some extent in the oil price, they fell as a whole.
The main part of the sale was due to the fall of the “liberation day” on April 2, when President Trump announced much higher rates than expected in a wide range of countries, including friendly allies and adversary commercial partners such as China.
After the day of release, oil prices and stocks fell strongly as investors were afraid of the recession or a Stagflationry slowdown. Given that oil is not one of the goods subject to high rates, however, a financial slowdown caused by the rates will probably be the demand in a large way, leading to lower prices.
Stocks, however, were recovered from April to the end of the month, as the administration gave some fare exemptions and understood that commercial offers would be made soon, probably with the Allies.
But why did oil prices not recover, as did the stocks? By a couple of reasons. First, while the administration has said that it was about to make some commercial offers, which could cause the rates to be reduced, it is likely that negotiations with China will be prolonged. If the highest rates are in China, this could hurt the country’s demand, which is still the second largest oil consumer in the world behind the United States, even if allies are made, a long and long trade war with China could still depress oil demand.
Second, on April 30, it was reported that Saudi Arabia would no longer be ready to favor prices with sustained production cuts and that production can really increase from June to try to recover the market share. This could be for some reasons: one, Saudi Arabia could try to force the cuts of the highest prices. It has also been suggested that increases can lead to a change in the United States administration by maintaining low oil prices.
Oil is a commodity, so the highest potential production of the OPEC+ that will come in June is likely that what oil prices recover as the stocks did. Ironically, although it is believed that the administration is pro-Petroleum and Gas, it also presses the lowest prices. So it may be bad Oil -related stocks Like these three.
Image Source: Getty’s pictures.
In the meantime, Halliburton fell after the April results launch. Halliburton exceeded the expectations of the first quarter revenue and met the expectations of adjusted action gains (NO GAAP), although revenue still fell by 6.6% year -on -year.
But in addition to the numbers reported, the main reason for the decrease was probably the commentary on the direction. CEO Jeff Miller warned that Halliburton waters were re -evaluating their drilling plans as a result of the April 2 fare ads, which increased the probability of the most falls in the coming quarters. The management also provides for an impact of two to three cents of commercial tensions, not only on the side of the demand, but also on the side of the offer, due to the highest prices of steel and aluminum.
If the OPEC+ increases production in June as expected, oil prices may be likely to be kept at these low levels for quite some time. After all, the United States economics has not seen that the impact of April 2 is still reproduced. Although some rates have been relaxed and some commercial offers may occur, it is likely that the ongoing uncertainty, both in the United States and in China, weighing on demand.
Great oil and gas actions may be good to keep dividends at these prices; They can also serve as a fence against geopolitical supply interruptions, especially if this involves Iran. However, absent, it seems that the oil price can continue to be puzzling this year. It may be good news for an economy affected by rates, but it is probably not great news for oil and gas stocks.
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