Why ExxonMobil and Chevron Fell Sharply at the Open on Thursday

Shares of globally diversified integrated energy company ExxonMobil (NYSE: XOM) fell more than 7% as the trading day began on June 11. Peer Chevron (NYSE: CVX) followed, dropping as much as 6.7% in the first half hour on Wall Street. To a large degree, these declines tracked the broader market, where the S&P 500 Index fell dramatically on concerns that the U.S. recovery from COVID-19 and the economic impacts of the effort to slow the coronavirus' spread weren't going to be as swift as expected in recent days.

And yet there's more of a story to tell in the oil patch.

An economic recovery is vital for the energy sector if oil prices are to recover, and that will depend partially on how quickly the world moves past, or at least learns to deal with, COVID-19. So bad news on both of these fronts isn't good for Exxon or Chevron. Indeed, the U.S. Federal Reserve's recent economic comments were hardly uplifting (the need to keep rates low for longer is a bad omen), and neither was the news of rising coronavirus cases in states that have reopened for business.

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Source Fool.com