Exxon Mobil Corp. (NYSE: XOM) and Chevron Corp. (NYSE: CVX), the two largest U.S. oil companies and two stocks that combine for almost a third of XLE’s roster, are two of just six members of the Dow Jones Industrial Average that are down at least 5% year-to-date.
The challenge for energy equities is that some oil market observers see more declines coming for crude. Oil traders are concerned over how fast U.S. shale oil producers will increase production to capture the rising prices.
OPEC renewed an agreement with a dozen other crude-oil producers to withhold supplies into March 2018 in an attempt to raise prices despite increasing output from U.S. shale oil producers, the Wall Street Journal reports. The agreement would maintain levels of production at about 1.8 million barrels per day lower than late last year, or about 2% of global oil supply being withheld.
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