Energy stocks sell off on Monday, leading the decline on Wall Street amid a sharp pull back in oil and natural gas prices. Despite the retreat, energy stocks maintain a bullish outlook.
Oil is likely to remain supported in the short term amid expectations Europe will soon announce a plan to ban Russian oil imports and bets that the JCPOA nuclear deal will not be reinstated soon.
The U.S. economy takes a turn for the worse and contracts during the first quarter of the year, weighed down by a negative contribution from net exports and inventories.
WTI prices rise on Monday following news that Libya has temporarily suspended production at its largest oilfield and reports that the EU is drawing up a plan to ban Russian petroleum imports.
The 2s10s curve inversion has been a trustworthy recession harbinger, but may be less reliable this time considering that the structure of the U.S. economy has changed significantly in recent years.