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Key Takeaways
- Early Wednesday, shares of energy companies, oil drilling companies, and oilfield service providers all fell.
- Since President Trump announced tariffs, the price of crude oil has dropped by approximately 20% and is now at its lowest level since 2021.
- Crude prices dropped below $58 a barrel, and a recent study found that producers require an average of at least $65, in order to drill profitably.
Oil and related energy stock fell Wednesday, as the price of crude oil dropped to its lowest levels since 2021.
Chevron (CVX), Exxon Mobil(XOM), and BP(BP) all saw their shares fall between 2%-3% shortly after the opening bell. Oilfield services firms Halliburton Company and Schlumberger Limited, as well as drillers APA and Diamondback Energy also suffered losses.
Since President Trump announced the sweeping tariffs on last week, futures contracts for West Texas Intermediate crude oil, the U.S. benchmark crude oil, have fallen about 20%. Recent trading saw the price drop by about 3.5%, to below $57.50 per barrel after the U.S. announced sweeping tariffs and China retaliated.
According to the Federal Reserve Bank of Dallas’ most recent energy survey on oil producers, they require an average price of $65.50 per barrel to drill profitably, with almost 60% requiring higher prices.
