The market may be pushing higher in morning trade, but the same cannot be said for the energy sector.
At the time of writing, the S&P/ASX 200 Energy index is down 1.5% after energy shares dropped at the open.
Here's a summary of how they are performing:
- The Beach Energy Ltd (ASX: BPT) share price has fallen 1.5%.
- The Santos Ltd (ASX: STO) share price is down 1.5%.
- The Woodside Energy Ltd (ASX: WDS) share price has dropped 3%.
Why are ASX 200 energy shares falling?
Investors have been hitting the sell button on Wednesday after a very poor night of trade for oil prices.
According to Bloomberg, the WTI crude oil price is down 4.2% to US$76.90 a barrel and the Brent crude oil price has tumbled 4.4% to US$82.10 a barrel. Traders were selling oil amid concerns over Chinese demand and global economic growth.
Commenting on energy markets, courtesy of CNBC, Mizuho analyst Robert Yawger, said:
There is plenty of reason for concerns here – the China COVID-19 situation and the fear of recession in the foreseeable future is putting pressure on markets
This follows the release of poor economic data out of China and news that the Chinese government has raised its export quotas for refined oil products in the first part of 2023. The latter is being seen as a sign that the government is expecting poor domestic demand as the world's largest crude importer battles waves of COVID-19 infections.
In respect to global economic growth, IMF Managing Director Kristalina Georgieva spoke bleakly on Sunday about the year ahead. She highlights that the US, European, and Chinese economies were all slowing simultaneously, which is expected to make 2023 a tougher year than 2022 for the global economy.
