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Sector Update: Energy Stocks Decline Late Afternoon

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Energy stocks were lower late Wednesday afternoon, with the NYSE Energy Sector Index dropping 2.4% and the State Street Energy Select Sector SPDR ETF (XLE) falling 1.9%.

The Philadelphia Oil Service Sector Index slumped 3.7%, and the Dow Jones US Utilities Index was up 0.7%.

In sector news, ships have started sailing through the Strait of Hormuz under a new scheme by the International Maritime Organization to evacuate trapped vessels, a spokesperson told Reuters on Wednesday. The initiative will enable hundreds of ships with some 11,000 seafarers stranded in the Gulf to sail through Hormuz.

Front-month West Texas Intermediate crude oil fell 4.4% to $70.01 a barrel, and the global benchmark Brent crude contract dropped 5% to $73.25 a barrel. Henry Hub natural gas futures rose 2.6% to $3.23 per 1 million BTU.

US crude oil stocks, including those in the Strategic Petroleum Reserve, fell by 15.1 million barrels in the week ended June 19 following a decrease of 17.2 million barrels in the previous week. Excluding inventories in the SPR, commercial crude oil stocks declined by 6.1 million barrels after an 8.3-million-barrel decline in the previous week, a larger decrease than the 3.6 million barrel decrease expected in a survey compiled by Bloomberg.

In corporate news, Chevron's (CVX) Project Kilby, a planned 2.7-gigawatt power project for Microsoft's (MSFT) data centers in West Texas, could be expanded over time as Microsoft's power needs exceed the project's initial capacity, UBS Securities said following meetings with the company at an industry conference. Chevron shares were shedding 2.2%.

TotalEnergies (TTE) said Wednesday it has acquired a 10% stake in the Bab Gas Cap Concession in Abu Dhabi, joining an international consortium to develop the major onshore gas field. TotalEnergies shares were down 2%.

Sunrun (RUN) shares jumped 14% after the company agreed with Tesla (TSLA) and Renew Home to deliver more than 16 gigawatts of flexible energy capacity to hyperscalers and utilities.

Consolidated Edison (ED) Chief Executive Tim Cawley said the company needs to expand parts of its grid equipment to weather longer and more intense heat waves, Reuters reported Tuesday, citing Cawley's remarks at a forum held the same day. Consolidated Edison shares were rising 1.7%.

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