By Katherine Hamilton

Shares of energy companies touched new lows as tariffs and recession fears are creating concerns about dwindling demand and oversupply.

Exxon Mobil, Chevron, ConocoPhillips and HF Sinclair all touched 52-week lows at one point Wednesday morning, following steep declines since President Trump announced tariffs on April 2. The S&P 500 Energy Industry Group Index has lost about 20% of its value over the past five days, and touched a year low of $573.25 Wednesday.

Tariffs are driving fears of a recession, which could lead to lower demand for oil. Oil and gas are exempt from Trump's tariffs, but the price of oil has still fallen to a four-year low.

At the same time, the Organization of the Petroleum Exporting Countries said April 3 that more oil than anticipated is likely to come back to the market starting in May. The announcement was unexpected, Truist analyst Neal Dingmann said in a note, and adds to worries there will be an oversupply while demand dwindles.

Dingmann is still hopeful natural gas companies such as Exxon and Chevron can maintain demand and capital-disciplined supply. There is still potential for a rebound if tariffs don't happen or the economic environment otherwise stabilizes, Dingmann said, but that wouldn't benefit energy companies until later this year.

"Near-term natural gas seems like a better spot to hide than oil as there appears to be less gas surplus than oil," Dingmann said.

About a third of domestic natural-gas production comes from associated gas and is likely to fall if oil prices remain pressured, he said.

Write to Katherine Hamilton at katherine.hamilton@wsj.com

(END) Dow Jones Newswires

April 09, 2025 12:16 ET (16:16 GMT)

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