The Woodside Energy Group Ltd (ASX: WDS) share price is taking a tumble on Thursday.
In morning trade, the energy giant's shares are down 4% to $31.56.
Why is the Woodside share price falling?
Investors have been hitting the sell button today after oil prices sank for a second day in a row.
According to CNBC, WTI crude oil futures fell more than 5% to settle at US$67.61 per barrel and Brent crude oil fell 4% to settle at US$74.36 per barrel. The former was its lowest level since back in December 2021.
This has led to fellow energy shares falling along with Woodside on Thursday. Here's a summary of how energy shares are performing:
- The Beach Energy Ltd (ASX: BPT) share price is down 3%.
- The Karoon Energy Ltd (ASX: KAR) share price is down 2%.
- The Santos Ltd (ASX: STO) share price is down 3%.
What's going on?
The catalyst for the weakness in oil prices was news that the banking crisis has spread to Europe.
Overnight, Credit Suisse's biggest investor, the Saudi National Bank, revealed that it would not provide any further assistance for the struggling Swiss bank. This sparked fears that Credit Suisse could collapse and raised concerns over the state of the global banking system.
And while the Swiss National Bank advised that it will provide additional liquidity if necessary, this hasn't been enough to ease investor concerns about the global economy and ultimately demand for oil.
Ed Moya, a senior market analyst at Oanda, told CNBC that he expects oil to be stuck in a surplus for the near term. He said:
The oil market is going to be stuck in a surplus for most of the first half of the year, but that should change as long as we don't see a major policy mistake by the Fed that triggers a severe recession. Now near the mid-$60s, WTI crude's plunge is at the mercy of how much worse the macro picture gets.
The Woodside share price is now 11% in 2023.
