Energy shares fell even as crude prices extended their gains as traders position for higher demand stemming from the global economic recovery and summertime travel.
U.S. benchmark oil prices finished a touch higher, but that was still enough for a fresh, 32-month high. Buying of the commodity came mostly after the EIA reported a bullish, 7.4-million-barrel, weekly drop in U.S. oil inventories. But that price-supportive sentiment was countered later in the session due to risk aversion after the Federal Reserve signaled it expects to raise interest rates by late 2023.
Markets were also caught off-guard by a rare increase in U.S. oil production to 11.2 million barrels a day, which is the highest output in 13 months. Natural gas prices declined for a second straight session after hitting a seven-month high Monday.
A federal judge in Louisiana issued a preliminary injunction blocking the Biden administration from pausing new oil and gas leases on federal land. Judge Terry A. Doughty of the U.S. District Court in Monroe said the administration doesn't have the legal right to stop leasing federal territory for oil-and-gas production without approval from Congress.
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(END) Dow Jones Newswires