Oil Prices Plunge, Dragging Energy ETFs Lower at the Open

Oil prices plummeted early Tuesday, dragging energy exchange-traded funds (ETFs) lower before the market opened. Crude oil futures took a hit, with West Texas Intermediate (WTI) falling by 2.4% to $93.51 per barrel and Brent sliding 1.8% to $98.50.

The US Oil Fund (USO), which tracks oil futures, dropped 2.9% premarket, while the Energy Select Sector SPDR Fund (XLE) declined 1.4%. In contrast, natural gas futures rose by 0.3% to $2.84 per million British thermal units (MMBtu), sending the United States Natural Gas Fund (UNG) up 0.4%.

A few company updates added some color to the story, but didn't change the bigger picture. TotalEnergies, a French oil and gas major, signed a memorandum of understanding with Venezuela's state oil firm PDVSA through its exploration and production new ventures unit. Solaris Energy Infrastructure lined up a $1 billion offering of senior notes due 2032, while ProPetro said its Propwr unit secured long-term contracts for about 230 megawatts of power generation capacity with a Targa Resources subsidiary.