Investors are losing one of their few places of refuge in this year’s stock market plunge, as the selloff in energy shares that started last month is leaving them with nowhere to hide.
Energy is the worst performing group in the S&P 500 Index over the past five sessions and is in the red again Friday. The S&P 500 Energy Sector index is down 18% since the start of last month, compared with a 6% decline in the S&P 500. The stocks are even underperforming the 9% drop in West Texas Intermediate crude.
That said, energy remains the lone S&P sector to rise this year after beating the broader market for 20 months through May.
However, the troubling news has been coming in waves. Just this week, the US Energy Information Administration released crude oil storage data that was “negative for the oil complex,” showing an unexpected build of 8.2 million barrels, MKM Partners analyst Leo Mariani wrote in a note. The figures are “bearish for crude over the longer term” because they imply “that the market is oversupplied,” he wrote.
