US energy stocks were in the firing line once again after oil sank to fresh seven-month lows amid persistent concerns over the global supply glut.
Brent crude, the international benchmark, fell as much as 3.2 per cent to to $45.42 a barrel in Tuesday trading, while West Texas Intermediate, the US marker, dropped 3.3 per cent to $42.76 a barrel.
“Bearish sentiment is pervasive in oil markets as bulls have been burned on several occasions this year,” said Citigroup commodities strategists, noting however that in their view, “misperceptions of the current market are keeping oil prices suppressed”.
The S&P 500 energy index dropped 1.5 per cent on Tuesday, with all of the stocks listed on the gauge lodged in the red. Exploration and production groups, seen as especially sensitive to the price of oil, faced some of the heaviest selling. Apache and Marathon Oil both shed 3.5 per cent.
Meanwhile, Kinder Morgan, a large operator of energy infrastructure, fell 2.6 per cent.
Looking at the oil majors, ExxonMobil edged 0.8 per cent lower, and Chevron fell 1.1 per cent.