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Sector Update: Energy Stocks Fall Wednesday Afternoon

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Energy stocks were lower Wednesday afternoon, with the NYSE Energy Sector Index falling 1.2% and the State Street Energy Select Sector SPDR ETF (XLE) dropping 1.6%.

The Philadelphia Oil Service Sector Index shed 1.2%, and the Dow Jones US Utilities Index was down 0.6%.

Iran is now signaling it could use Yemen's Houthi allies to shut the Bab el-Mandeb gateway to the Red Sea, opening a new front against Washington and putting two of the world's most important energy arteries at risk, Reuters reported. As US strikes deepen inside Iran and Houthi attacks escalate in tandem, analysts said Tehran is widening the conflict and seeking to increase pressure on Washington by extending the threat to global trade and energy supplies beyond the Gulf, the report said.

Front-month West Texas Intermediate crude oil eased 0.5% to $78.92 a barrel, and the global benchmark Brent crude contract shed 0.5% to $84.32 a barrel. Henry Hub natural gas futures rose 0.9% to $2.93 per 1 million BTU.

In sector news, US crude oil stocks, including those in the Strategic Petroleum Reserve, declined by 4.7 million barrels in the week ended July 10 following a decrease of 3.2 million barrels in the previous week. Excluding inventories in the SPR, commercial crude oil stocks fell by 1.7 million barrels after a 3.0-million-barrel gain in the previous week, a smaller decline than the 1.8 million-barrel decrease expected in a survey compiled by Bloomberg.

In corporate news, BP (BP) said Wednesday it agreed to sell BP Ventures' minority interests in more than 10 portfolio companies to European private equity firm Verdane. BP shares were off 0.7%.

Shell (SHEL) has kicked off a tendering process for drilling services at its Dragon offshore gas project in eastern Venezuela, pressing ahead with its plan to start drilling four wells from Q2 2027, Reuters reported. Shell shares were down 0.2%.

Halliburton (HAL) said it was awarded a multiyear contract from Aramco to provide stimulation and completion services supporting unconventional gas development in Saudi Arabia. Halliburton shares were shedding 1.2%.

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