Oil Falls To $55 And Energy Stocks Suffer Worst Day Since April

Oil and gas stocks extended their selloff Tuesday as crude prices slid to levels not seen in nearly five years, pressured by rising expectations of a Russia-Ukraine peace deal and mounting supply concerns.

West Texas Intermediate crude – as tracked by the United States Oil Fund (NYSE:USO) – fell 2.6% to $55 a barrel, marking a fourth straight session of declines. Prices hovered near their lowest levels since January 2021.

Natural gas prices also weakened, with Henry Hub futures sliding nearly 3% to $3.89 per million British thermal units, on track for a sixth decline in seven sessions.

On Wall Street, oil and gas stocks bore the brunt of the selloff, underperforming other sectors. The Energy Select Sector SPDR Fund (NYSE:XLE) dropped 2.9%, its worst session since April 10, 2025.

Ceasefire Expectations Cap Crude's Upside

The decline followed renewed optimism that the war in Ukraine could be approaching an end. U.S. and Ukrainian officials said they made substantial progress during two days of talks aimed at ending Russia's invasion.

According to Reuters, Washington offered security guarantees for Kyiv modeled on NATO's Article 5 mutual defense pledge.

"We're trying to get it done, and I think we're closer now," President Donald Trump told reporters in the Oval Office on Dec. 15, following several days of negotiations involving U.S., European and Ukrainian delegations in Berlin.

Betting markets reflected the shift in sentiment. On Polymarket, the implied probability of a Russia-Ukraine ceasefire by Jan. 31, 2026, rose to 14%, up from 8% just two days earlier. A $100 wager would return $677 if a ceasefire is reached by that date.

Separately, the odds that Ukraine officially agrees to a U.S.-backed ceasefire framework by year-end stood at 17%.

The prospect of eased sanctions on Russian energy exports added pressure to an oil market already grappling with abundant supply and weakening demand signals.

The U.S. labor market showed further signs of cooling in November, with payroll growth of 64,000 remaining below a pace consistent with robust hiring, while the unemployment rate unexpectedly climbed to 4.6% from 4.4%.

According to Benzinga Pro data, the following were the 10 worst-performing energy stocks on Tuesday among companies with market capitalizations above $10 billion:

Tuesday’s Worst Performers In The Energy Sector

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