Energy stocks were lower late Wednesday afternoon, with the NYSE Energy Sector Index falling 1.4% and the State Street Energy Select Sector SPDR ETF (XLE) decreasing 1.1%.
The Philadelphia Oil Service Sector Index slumped 2.9%, and the Dow Jones US Utilities Index shed 0.6%.
Front-month West Texas Intermediate crude oil fell 5.3% to $88.94 a barrel, and the global benchmark Brent crude contract dropped 5.1% to $94.52 a barrel. Henry Hub natural gas futures rose 5% to $3.04 per 1 million BTU.
In sector news, the memorandum of understanding being negotiated between Tehran and Washington will call for US forces to withdraw from Iran's vicinity and lift the blockade of Iranian ports in return for reopening the Strait of Hormuz to pre-war levels, CNN reported, citing Iranian state television. The US denied claims that maritime traffic through the Strait of Hormuz could return to normal within a month of the Iran deal, Bloomberg reported. President Donald Trump on Wednesday expressed confidence that the US would be able to reach a deal to end the conflict, but he is not yet satisfied with the terms, CNN reported.
In corporate news, Kosmos Energy (KOS) shares fell 6% after Mizuho downgraded the stock to underperform from neutral.
TotalEnergies (TTE) is facing a dispute with Mozambique over about $2 billion in costs tied to delays at its liquefied natural gas project in the country, Bloomberg reported. TotalEnergies shares fell 3.6%.
Chevron (CVX) shareholders have rejected a proposal put forth at the company's annual general meeting that would have required appointing an independent board chair separate from the chief executive officer, Reuters reported, citing preliminary voting results. Chevron shares were down 1.4%.
DTE Energy (DTE) added 0.3% after the firm said it will invest $1.6 billion to develop Michigan-made battery energy storage systems in collaboration with LG Energy Solution Vertech.