Devon Energy Corp (DVN)

Shares of Devon Energy (DVN) dropped by 5.25% from $45.75 to $43.35 in the trading on Wednesday October 4, 2023. The reasons why stock DVN is down today includes:

• Oil prices fell sharply: Oil prices experienced a substantial decline of more than 5% on October 4, marking the most significant single-day drop since March 2020. Several factors contributed to this downturn, notably concerns surrounding a potential global economic recession, the upward trajectory of interest rates, and the strengthening of the US dollar. Devon Energy, a prominent player in the oil production sector, exhibits a strong correlation between its stock price and oil prices. Consequently, when oil prices decrease, Devon Energy's stock price follows suit.
• US weak oil and gas demand: According to the U.S. Energy Information Administration's (EIA) report on Wednesday, last week's finished motor gasoline supplied, a demand indicator, hit a yearly low at around 8 million bpd. Severe weather, including flooding in New York and post-tropical storm Ophelia, likely contributed to this drop. JP Morgan's commodity analysts noted that U.S. gasoline consumption is currently at its lowest point in 22 years. Additionally, a 30% increase in fuel prices during the third quarter of the year led to an unexpected 223,000 bpd decline in demand, defying typical seasonal patterns. The decline in demand for oil and gas would hurt the profits of oil and gas companies like DVN.