Oil stocks are sliding today as investors bet that Covid-19 containment measures in China will reduce the country’s demand for petroleum. Specifically, after China implemented lockdowns in portions of Beijing, the price of West Texas Intermediate crude oil began to tumble. It is currently down 6.5% to $95.50.
So what is going on with oil stocks today?
Well, for more than a month, Wall Street had focused on lockdowns that the Chinese government imposed in Shanghai. Now it appears that the government is beginning to take similar measures in the country’s capital of Beijing. Moreover, yesterday, 51 people died from Covid-19 in Shanghai, setting a record.
Likely adding to concerns about declining demand for oil, the IMF last week cut its forecast for 2022 global growth to 3.6%, well below its outlook for a 4.4% expansion in January.
What Is Going on With Oil Stocks Today?
On a positive note for oil stocks, two companies that provide tools for petroleum exploration and production recently reported very strong first-quarter results. Schlumberger (NYSE:SLB) unveiled higher-than-expected Q1 revenue and earnings per share on April 22 and noted that it had posted its highest Q1 margins in about seven years. Halliburton’s (NYSE:HAL) Q1 EPS came in 1 cent higher than analysts, on average, had expected. Its net income surged to $263 million last quarter, well above the $170 million that it had generated during the same period a year earlier.
In morning trading Exxon Mobil (NYSE:XOM) slumped 6.8%, Chevron (NYSE:CVX) dropped 4.7%, Marathon Oil (NYSE:MRO) retreated 8.4% and Occidental Petroleum (NYSE:OXY) sank 7.5%.
On the date of publication, Larry Ramer did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.