Dragging on markets, the energy sector weakened, with the the Energy Select Sector SPDR (NYSEArca: XLE), the largest equity-based energy exchange traded fund, down 0.9% Wednesday.
The energy sector slipped on forecasts that U.S. crude stockpiles expanded. The Energy Information Administration will provide definitive inventory data Wednesday.
“The fundamentals actually do matter sometimes,” Bob Yawger, director of the futures division at Mizuho Securities USA Inc., told Bloomberg. “We’re expecting the API and EIA to report another supply build. The focus is returning to the reality that fundamentally we’re oversupplied.”
Despite the Organization of Petroleum Exporting Countries’ efforts to curtail production, U.S. producers, notably the upstart shale industry, have ramped up productiong as crude prices increased, capping any gains in the oil market.
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