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Tullow Oil, Harbour Energy share prices plunge as oil dives

Energy stocks have pulled back in the past few weeks as the focus shift to the plunging oil and gas prices. The closely-watched Vanguard Energy ETF (VDE) has dropped to $110 from the year-to-date high of $131. Small-cap energy companies like Tullow Oil (LON: TLW) and Harbour Energy (LON: HBR) have performed worse.

Crude oil prices retreat

One of the top themes in the market this week is the plunge of oil prices, as I wrote in this article. Brent, the global benchmark, plunged to a low of $72.33, the lowest point since December 2021. Similarly, the West Texas Intermediate (WTI), dropped to almost $60.

This price action happened as concerns about the global economy outweighed the recent production cuts by OPEC+. These cuts started this week and will see the cartel reduce output by over 1.7 million barrels per day.

Therefore, analysts believe that the bearish trend will continue since Russia is still selling millions of barrels of oil per day. If this happens, we could see the WTI drop to $50 and Brent move to $65 in the coming days.

Watch here:

Impact on Tullow Oil and Harbour Energy

Lower oil prices will have an impact on all oil and gas companies. However, as results by Shell demonstrated, it is the smaller oil companies will suffer. Results by Shell showed that the company’s profits surged to over $9 billion in the first quarter. Firms like ExxonMobil and Chevron are also expected to publish strong results.

This fear explains why the Tullow Oil and Harbour Energy share prices have underperformed the VDE ETF. For example, Tullow Oil share price has crashed to the lowest point since February 2021. It has fallen by over 61% from its highest point in 2021.

Similarly, Harbour Energy share price has plunged to the lowest point since November 2020. It has retreated by 90% from its 2020 highs. Sadly, this trend could continue in the coming months if oil prices maintain their bearish trend.

The post Tullow Oil, Harbour Energy share prices plunge as oil dives appeared first on Invezz.

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