Energy Sector Faces Worst Daily Drop In 3 Months As Oil Prices Tumble

A popular fund tracking the energy sector on Wednesday was on pace for its steepest one-day slide in more than three months after crude-oil futures sank on the heels of a report showing a smaller-than-expected drop in U.S. inventories. The Energy Select Sector SPDR ETF was down 2.3%, which would mark the worst daily drop for the exchange-traded fund, if it holds, since March 8 when it fell 2.6%, according to FactSet data. All of the ETF's components were trading in the red, led by a 6.2% decline in shares of Transocean Ltd. and a 5.1% fall in Murphy Oil Corp. . The moves come as the inventory report, released Wednesday at 10:30 a.m. Eastern, drove crude-oil futures for July delivery sharply lower. Data from the U.S. Energy Information Administration showed that domestic-crude supplies fell by 1.7 million barrels for the week ended June 9. Analysts at Citi Futures expected a decline of between 2 million and 3 million barrels. The broader market also was under pressure, with the Dow Jones Industrial Average was off 0.1%, the S&P 500 index was trading down 0.2%, while the Nasdaq Composite Index was off 0.1%. Crude futures have been dogged by persistent concerns about a glut of oil, despite recent efforts led by members of the Organization of the Petroleum Exporting Countries to curb output by extending a six-month output limit that would have ended this month until March 2018. U.S. shale producers, who are not party to the production limits, have been often cited as the biggest headwind to these global output agreements.