Listen to this article
The US energy sector took a hit on Monday amid rising concerns that American drillers will be pumping oil more aggressively with crude prices sitting north of $50 a barrel.
The S&P 500 energy sector slipped on Monday by 1 per cent, leading the decline on the benchmark index. Transocean, an operator of offshore oil rigs, was among the worst performers, falling by 3 per cent to $13.45.
Meanwhile, exploration and production companies that are seen as sensitive to fluctuations in the oil price also took a hit. Marathon Oil declined by 3.7 per cent to $16.59, while Apache was down by 2.9 per cent to $57.94.
The selling pressure comes amid concerns that the uptick in oil prices over the past few months would prompt US drillers to turn rigs back online at a quicker pace, offsetting a production cut that was agreed to by Opec, Russia and other major exporters.
The latest evidence of that possibility came last Friday, when Baker Hughes data showed that the US oil rig count climbed by 17 in the week ending February 3, and is up by 61 over the past three weeks.
In the commodities market, West Texas Intermediate, the US benchmark, was down by 1.5 per cent to $53.03 a barrel, while global marker Brent slipped by 1.9 per cent to $55.81.