One area of the market that is a sea of red on Wednesday is the energy sector. At the time of writing, the S&P/ASX 200 Energy Index is down a sizeable 5.5%.
This follows a significant pullback in oil prices overnight, which is weighing heavily on ASX energy shares.
According to Bloomberg, the WTI crude oil price fell more than 10% before eventually closing the session 8.2% lower at US$99.50 per barrel. The Brent crude oil price ended the session 9.45% lower at US$102.77 a barrel.
Traders were selling oil in a panic amid concerns that a global recession could lessen demand for energy products.
Which ASX oil shares are falling today?
You will be hard-pressed to find an ASX oil share performing positively on Wednesday.
Here's a summary of how some shares are performing in the energy sector:
- The Beach Energy Ltd (ASX: BPT) share price is down 7%
- The Santos Ltd (ASX: STO) share price is down 5%
- The Woodside Energy Group Ltd (ASX: WDS) share price is down 7%
What's next for oil prices?
Where oil prices, and therefore ASX oil shares, go next will depend ultimately on what happens with the global economy.
For example, a note out of Citi warns that yesterday's decline could be a sign of things to come if the global economy falls into a recession. Its analysts are forecasting a decline into the US$60s a barrel if a recession occurs.
Citi said: "In a recession scenario with rising unemployment, household and corporate bankruptcies, commodities would chase a falling cost curve as costs deflate and margins turn negative to drive supply curtailments."
