Energy Stocks Sink on War and Downgrade Headlines

Oil prices continue to decline on hope that the U.S. and Iran can broker an agreement to end war, and energy stocks are moving lower.

Conflicting headlines on the U.S.-Iran war are greeting investors to start this shortened trading week, but no deal has been signed. Exports of crude and liquefied natural gas (LNG) from Qatar and Iraq have made their way through the Strait of Hormuz, destined for Pakistan, China and India ports, according to Bloomberg and other news reports over the weekend.

U.S. oil futures were down more than 4% to a recent $96.90 per barrel. Among S&P 500 energy names, the biggest losers in pre-market trading, each down more than 1%, included ConocoPhillips (COP), Devon Energy (DVN) and EOG Resources (EOG).

President Donald Trump made positive comments about Iran-agreement negotiations on social media; the U.S. and Iran agreed in principle to a deal that could wind down the war, The New York Times reported. However, the U.S. also conducted “self-defense strikes” against Iranian military targets such as missile launch locations and mine-deploying boats.

Other notable energy market news:

• The BP (BP) board voted to remove Chairman Albert Manifold over “governance oversight and conduct issues it deems unacceptable,” according to news reports. BP shares sank 5% in pre-market trading.
•  Ukrainian officials confirmed that military strikes shuttered the Syzran oil refinery in Russia.
• Barclays upgraded Occidental Petroleum (OXY) to Overweight from Equal Weight and the shares were down 0.87% in pre-market trading.
• Danske Bank downgraded Frontline (FRO), which owns and operates tankers that ship oil and other products, to Hold from Buy. The stock was down nearly 2% in pre-market trading.

Watch our coverage on developments in the Middle East and view all our latest energy industry headlines.

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