Oversupply Narrative Keeps Pressure on US Exploration, Production Stocks, RBC Says

() -- US exploration and production stocks remained under pressure as lower oil prices and persistent oversupply concerns weighed on sector sentiment, RBC Capital Markets said in a note on Wednesday. RBC said US drilling activity remained largely unchanged, with Permian rig counts only slightly higher year to date. Private operators have increased activity, although weaker oil prices could slow that trend. Oil prices remained below $70 per barrel as markets assessed US-Iran talks that suggested improved shipping through the Strait of Hormuz. RBC said the oversupply narrative remained dominant as Russian and Saudi supply increased while the UAE boosted crude exports to a record 3.7 million barrels per day in June after leaving the Organization of the Petroleum Exporting Countries in May. A 3.8 million-barrel decline in commercial crude inventories, together with a 5.5 million-barrel release from the Strategic Petroleum Reserve, reduced total US oil inventories to their lowest level since 1984, RBC said, citing Department of Energy data. Gas-weighted exploration and production companies gained 2% over the past week, while oil-weighted peers lost 3%. Large-cap stocks dropped 4% and.