The energy sector could deliver an operating EPS loss over Q1 for the first time this century. While crude oil prices plunged over the past year, energy producers still managed to eke out positive gains in prior quarters. Stovall attributes the worsening conditions in the energy space to the lower spread between Brent and WTI oil, which hurts refiners and companies with downstream operations, and belt-tightening from producers, which puts more pressure on oil services and drillers to slash costs.
“U.S. production may drop by 725,000 barrels a day in 2016, implying a monthly reduction of 85,000 barrels a day for the rest of the year, according to Goldman. Daily output was at 9 million barrels as of early April, data from the Energy Information Administration show,” according to Bloomberg.
SPDR S&P Oil & Gas Exploration & Production ETF