In a year that’s offered few places for investors to hide, Energy has been a bright spot. The growth-dominated Nasdaq is down nearly 30%, and bonds are on track for their worst year in at least 50 years. Meanwhile, the S&P 500 Energy sector hasn’t spent a single day in negative territory.
It seems that run of outperformance has come to an end. Crude oil dropped to its lowest level of the year last week, closing near $70 a barrel. That’s 45% below the March highs.
At $70, prices are still well above the average cost of production globally and far above the sub-$40 levels seen just two years ago. That hasn’t kept Energy stocks from falling, though. Energy dropped 8% last week, lagging all other sectors as the S&P 500 dropped more than 2%.
Continue reading “Energy Stocks Running Out of Gas”