Woodside Energy Group Ltd (ASX: WDS) shares are ending the week on a disappointing note.
In morning trade, the ASX 200 energy giant's shares are down 3% to $31.17.
They are both down over 1% at the time of writing.
What's going on with Woodside shares?
Investors have been selling ASX 200 energy shares today after oil prices crashed overnight.
According to CNBC, the WTI crude oil price fell 4.9% to settle at US$72.90 a barrel and the Brent crude oil price was down 4.6% to settle at US$77.42 a barrel.
This meant that both the U.S. crude and global benchmarks hit their lowest levels since early July.
Why are oil prices tumbling?
The main catalyst for the weakness in oil prices was concerns over supply growth and the demand outlook.
In respect to supply, CNBC reports that Energy Information Agency data shows that U.S. crude inventories rose by 3.6 million barrels last week, while production held steady at a record 13.2 million barrels per day.
Combined with a 0.6% decline in US industrial production, where a lot of oil is consumed, there are concerns that supply could be outstripping demand, which is never good for prices. You only need to look at how lithium prices have fallen this year to see that.
Adding further pressure to prices is news that Chinese crude refining throughput slowed 2.8% in October to the equivalent of 15.1 million barrels per day from a record high in September. This suggests that demand for oil in the world's second-largest economy is slowing.
Jim Burkhard from S&P Global Commodity Insights highlights that China's COVID reopening impact on oil prices is now fading at a time when the U.S. is producing more oil than any country has in history.
Burkhard adds: "When you have strong wave of non-OPEC+ supply growth and a seasonal decline in demand it leads to a situation like this."
But there could be some good news for Woodside shares. OPEC remains convinced that speculators are keeping oil prices down and expects things to change in due course.
Earlier this month, it said: "Despite the above healthy and supportive market fundamentals, oil prices have trended lower in recent weeks, mainly driven by financial market speculators." It is scheduled to meet on 26 November to decide on future production plans.