The Woodside Energy Group Ltd (ASX: WDS) share price is taking a tumble on Thursday.
In morning trade, the energy giantâs shares are down 4% to $31.56.
Why is the Woodside share price falling?
Investors have been hitting the sell button today after oil prices sank for a second day in a row.
According to CNBC, WTI crude oil futures fell more than 5% to settle at US$67.61 per barrel and Brent crude oil fell 4% to settle at US$74.36 per barrel. The former was its lowest level since back in December 2021.
This has led to fellow energy shares falling along with Woodside on Thursday. Hereâs a summary of how energy shares are performing:
- The Beach Energy Ltd (ASX: BPT) share price is down 3%.
- The Karoon Energy Ltd (ASX: KAR) share price is down 2%.
- The Santos Ltd (ASX: STO) share price is down 3%.
Whatâs going on?
The catalyst for the weakness in oil prices was news that the banking crisis has spread to Europe.
Overnight, Credit Suisseâs biggest investor, the Saudi National Bank, revealed that it would not provide any further assistance for the struggling Swiss bank. This sparked fears that Credit Suisse could collapse and raised concerns over the state of the global banking system.
And while the Swiss National Bank advised that it will provide additional liquidity if necessary, this hasnât been enough to ease investor concerns about the global economy and ultimately demand for oil.
Ed Moya, a senior market analyst at Oanda, told CNBC that he expects oil to be stuck in a surplus for the near term. He said:
The oil market is going to be stuck in a surplus for most of the first half of the year, but that should change as long as we donât see a major policy mistake by the Fed that triggers a severe recession. Now near the mid-$60s, WTI crudeâs plunge is at the mercy of how much worse the macro picture gets.
The Woodside share price is now 11% in 2023.
The post Why is the Woodside share price sinking today? appeared first on The Motley Fool Australia.
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More reading
- Why 29Metals, Eagers Automotive, Northern Star, and Woodside shares are dropping today
- Woodside share price sinks as oil remains under pressure
- What’s the forecast for the oil price in 2023?
- 5 things to watch on the ASX 200 on Wednesday
- Down 12% in a week, has the Woodside share price got further to fall?
Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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