What happened

Energy investors can't seem to catch a break.

After falling basically nonstop for a full week, oil prices briefly bounced back on Tuesday, then just turned around and resumed falling this morning. As of 10:50 a.m. ET today, the price of a barrel of WTI crude is down 4% to about $68.50. Brent crude, the international benchmark, isn't off quite so much, but it's still down -- 3.7%, to just about $74.50 a barrel.

Unsurprisingly, oil stocks are continuing to follow oil prices lower. Chevron (CVX 0.52%) stock slid 3.3%, ExxonMobil (XOM -0.08%) exxed out 4%, and Devon Energy (DVN -0.17%) dropped 6.1%.

So what

So what's ailing oil markets this morning? OilPrice.com links the renewed slide in oil prices to the arrival of "yet another banking catastrophe" at Credit Suisse, which revealed yesterday that it's losing customers and has discovered "material weaknesses" in its accounting. But it's not immediately obvious why Credit Suisse's troubles -- even coming on the heels of the failures of a pair of American banks over the weekend -- would mean that oil prices should get cheaper.  

On the one hand, yes, banks having problems could cause them to reduce their lending. Less lending could drag on the economy, slowing it down -- and slowing down demand growth for oil. Adding to investor worries, the U.S. Energy Information Administration noted that U.S. oil inventories grew by 1.6 million barrels last week (after declining by 1.7 million barrels the week before).  

But these short-term market gyrations notwithstanding, I have to say that the long-term outlook for oil prices is still pretty good.

Now what

Consider that Russian oil production declined in 2022 and is set to decline again in 2023 -- including a 500,000-barrels-per-day (BPD) production cut that begins this month. Within OPEC, Saudi Arabia's Energy Minister just reiterated his organization's commitment to cutting production by a further 1.5 million BPD (from October 2022 levels) on top of Russia's cuts (so 2 million BPD total).    

Meanwhile on the demand side, financial markets forecaster Refinitiv says oil demand this year will rise by 2 million BPD, with China's reopening economy accounting for one-third of that growth.    

Lower supply and higher demand? That sounds like a recipe for rising oil prices to me, and over at Refinitiv they're predicting Brent prices will hit $100 before the year is out.

Long story short, there's a lot of noise in this market, and absent a crystal ball, it's hard to say which direction oil prices -- or oil stocks -- will end up moving. But I have to say, with Chevron stock still trading for a lowly 9.1 times trailing earnings, Exxon costing just 8.6 times earnings, and Devon shares selling for a P/E ratio of only 6.0 -- and paying a 7.1% dividend yield! -- you're not paying a lot to bet on there being upside in oil stocks today.