• 3 minutes e-car sales collapse
  • 6 minutes America Is Exceptional in Its Political Divide
  • 11 minutes Perovskites, a ‘dirt cheap’ alternative to silicon, just got a lot more efficient
  • 4 days How Far Have We Really Gotten With Alternative Energy
  • 15 hours The United States produced more crude oil than any nation, at any time.
  • 3 hours China deletes leaked stats showing plunging birth rate for 2023
  • 1 day The European Union is exceptional in its political divide. Examples are apparent in Hungary, Slovakia, Sweden, Netherlands, Belarus, Ireland, etc.
  • 6 days Bad news for e-cars keeps coming
Falling Energy Prices Spark Hopes for Fed Rate Cuts

Falling Energy Prices Spark Hopes for Fed Rate Cuts

US inflation unexpectedly remained flat…

Tesla and Baidu Partner for Full Self-Driving Test

Tesla and Baidu Partner for Full Self-Driving Test

Tesla begins testing its Full…

OPEC Demand Forecast Boosts Bullish Sentiment in Oil Markets

OPEC Demand Forecast Boosts Bullish Sentiment in Oil Markets

An optimistic demand forecast from…

Charles Kennedy

Charles Kennedy

Charles is a writer for Oilprice.com

More Info

Premium Content

Oil Price Rout Sends Ripples Across Related Industries

  • Despite OPEC+ production cuts and Russia’s war in Ukraine, oil prices are falling due to economic fears in the U.S. and China.
  • The drop in oil prices is now spreading to related industries, with tanker owners seeing their stocks dive.
  • The current downside demand risk and negative macroeconomic sentiment is likely to cause the market to heavily discount companies exposed to energy markets.

Oil prices are down despite OPEC+ production cuts and the war in Ukraine because of growing economic worries focused on the U.S. and China.

But this is no longer affecting traders only. The rout is spreading to related industries, including tanker owners, who are witnessing their stocks dive.

“We believe the market will more heavily discount energy exposed companies, including tanker owners, based on current downside demand risks and negative macroeconomic sentiment,” Deutsche Bank shipping analyst Chris Robertson said this week as quoted by Freight Waves.

“Oil prices have been on the decline over the past few weeks, falling further this week on weak manufacturing data out of China,” he noted.

Fresh data from China showed earlier this week that manufacturing activity in the world’s largest oil importer shrank in March, contrary to expectations of another expansion.

At the same time, clouds are gathering over the United States as Congress is locked in negotiations of the debt ceiling, with the word “default” beginning to appear increasingly often in news headlines.

The recent collapse of First Republic Bank only fuelled the negative sentiment, as did signals from Fed chairman Jerome Powell that this week will see yet another rate hike as the U.S. central bank continues to fight inflation with questionable success.

In more worrying signs, U.S. diesel demand is on the decline, suggesting a contraction in key industries such as freight transport, which has intensified fears of a recession in the world’s biggest economy.

It is, however, worth noting that talk about a U.S. debt default occurs every year when Congress starts discussing the debt ceiling. So far, defaults have successfully been avoided, and there is no reason why this year should be any different. That would leave the Fed and its interest rate policies the focus of attention, along with China.

By Charles Kennedy for Oilprice.com


More Top Reads from Oilprice.com:

Download The Free Oilprice App Today

Back to homepage

Leave a comment
  • Mamdouh Salameh on May 03 2023 said:
    This is expected since the global economy runs on oil and gas. Anything that affects oil and gas prices has an impact on other related industries.

    However, the author shouldn’t involve China in the oil price rout. This is a purely American affair involving a collapse of three American commercial banks which if followed by more bank collapses could precipitate a global banking or financial crisis.

    China’s economy is projected to grow this year at 5.2%-6.5% according to the IMF and could even exceed these growth projections. Even a powerful bullish factor like China could find it difficult to cope with a threat of a global banking crisis. Just remember the 2008 subprime financial crisis which started in the US and spread to the world.

    Dr Mamdouh G Salameh
    International Oil Economist
    Global Energy Expert

Leave a comment

EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News