The energy sector led a broad market selloff as worries that China-based property developer China Evergrande Group could default sent shivers through financial markets, including the crude oil market.
Oil futures settled lower as concerns fed risk-off sentiment and fueled strength in the U.S. dollar. All 22 components of the SPDR Energy Select Sector ETF fell. Among the ETF's most-active components, shares of Exxon Mobil fell nearly 3%, Occidental Petroleum shed 5.4%, and Marathon Oil slumped more than 4%.
Another factor weighing on markets was a natural-gas shortage in Europe that has prompted the U.K. government to hold emergency talks with energy suppliers, said Edward Park, chief investment officer at Brooks Macdonald.
In corporate news, Royal Dutch Shell is close to a deal to sell assets in the Permian basin, the most active U.S. oil field, to ConocoPhillips for around $9.5 billion, The Wall Street Journal reported, citing people familiar with the matter. That comes as Shell is attempting to cut its carbon emissions and invest more in renewable energy. Earlier, Shell became the first major oil company to announce targets for low-emission jet-fuel output and sales as airlines look to buy more of the fuel to meet climate-change goals and get ahead of proposed European Union regulations.
Separately, major oil companies will have a lower profile than those from other industries at the coming United Nations climate conference because the oil industry has yet to agree on science-based plans for how it will reduce carbon emissions, a hurdle U.K. organizers set as a prerequisite for involvement in the event.
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(END) Dow Jones Newswires