- EONR led losses, down 6%, followed by BATL at 3%, while USO and TPET slipped 0.5%; INDO was the only gainer, rising 0.5%.
- Brent crude eased toward $107, and WTI traded near $94, retreating from recent highs after signals of restraint from the U.S. and Israel and potential Iranian supply relief.
- Analysts and economists said supply risks remain despite the pullback, with inflation pressures and rising recession concerns still in focus.
Oil stocks fell in premarket trading on Friday as crude prices pulled back on easing Middle East tensions and potential supply relief, with JPMorgan warning that sustained high prices could still hit demand and earnings.
Shares of EON Resources (EONR) fell 6%, followed by Battalion Oil (BATL), which is down 3%. The United States Oil Fund (USO) slipped 0.5%, while Trio Petroleum (TPET) also declined 0.5%. Indonesia Energy (INDO) bucked the trend, rising 0.5%.
Brent crude slipped toward $107 a barrel, while West Texas Intermediate traded near $94, easing from recent highs.
JPMorgan Warns Of Demand Hit At $110 Oil
JPMorgan said markets may be underestimating the risk of a “negative transmission mechanism” from elevated oil prices, where prolonged disruptions weigh on GDP, demand and corporate revenues. The bank said if crude holds near $110, S&P 500 earnings estimates could fall by 2% to 5%, adding that investors are assigning “a low probability” to a demand hit by assuming a quick resolution and reopening of the Strait of Hormuz, Investing noted.
The warning comes as crude oil pulled back after U.S. and Israeli leaders signaled restraint following attacks on energy infrastructure. U.S. President Donald Trump said he is “not putting troops anywhere,” while Israel indicated it would refrain from further strikes on Iranian energy assets. European nations, Japan and Canada also signaled efforts to ensure safe passage through the Strait of Hormuz.
Oil faced additional pressure after Treasury Secretary Scott Bessent said the U.S. could lift sanctions on Iranian oil already at sea, raising prospects of added supply.
Analysts Warn Supply Shock Still In Play
Analysts said the decline in crude does little to resolve underlying tightness. Saxo Bank’s Head of Commodity Strategy Ole Hansen warned on X that “only a ceasefire and the reopening of the Strait of Hormuz are likely to prevent another tight supply-driven rally.” Hansen also said policy signals, including confirmation the U.S. is not considering an export ban, have helped narrow the WTI-Brent discount, though prices remain highly sensitive to developments around Hormuz.
Meanwhile, Goldman Sachs said attacks on energy assets pose “significant risks for not just near-term oil exports from the region, but longer-term oil production capacity.”
Swissquote strategist Ipek Ozkardeskaya said rising energy prices are pushing inflation higher while weighing on growth, adding that rate hikes are “only partially effective” in addressing supply-driven shocks.
Economists Flag Rising Recession Risks From Oil
Economists echoed similar concerns on the macro outlook. A Wall Street Journal survey showed expectations for higher inflation, with the impact on growth dependent on how long the oil shock persists. Some estimates suggest sustained elevated prices could significantly raise recession risks.
Bernard Baumohl of the Economic Outlook Group said the U.S. economy has remained resilient but warned that “surging oil prices” and geopolitical tensions should not be taken lightly.
How Did Stocktwits Users React?
On Stocktwits, retail sentiment was largely ‘bearish’ across stocks and ETFs including USO, TPET and BATL, with message volume remaining ‘low’ to ‘high’ across the group. INDO saw ‘neutral’ sentiment with ‘low’ activity, while EONR stood out with ‘extremely bullish’ sentiment accompanied by ‘extremely high’ message volume.
Over the past year, BATL surged over 1,000%, EONR doubled, USO gained 62% and INDO rose 48%, while TPET declined 23%.
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