ConocoPhillips Plummets 2.74% Amid Oil Market Turmoil: What’s Fueling the Selloff?

Summary
• ConocoPhillips (COP) trades at $94.45, down 2.74% intraday after opening at $97.19
• Exxon Mobil (XOM), sector leader, declines 1.98% as OPEC+ output decisions weigh on sentiment
• Options chain shows heightened volatility, with COP20260116P94 contract trading at 123.33% price change ratio
• Oil prices face crosscurrents from geopolitical risks and OPEC+ policy uncertainty, creating a volatile backdrop for energy stocks. COP’s sharp intraday drop reflects broader sector jitters amid mixed signals from global crude markets.

OPEC+ Output Stance and Geopolitical Risks Spur Energy Sector Jitters
COP’s 2.74% intraday decline aligns with broader oil market volatility triggered by OPEC+’s decision to maintain output levels through Q1 2026, as highlighted in recent sector news. The producer group’s firm stance on supply, coupled with geopolitical risks—including drone attacks on infrastructure and U.S. sanctions on Russian oil—has created a tug-of-war between short-term supply concerns and long-term demand uncertainty. Additionally, the Trump administration’s renewed focus on Venezuela’s oil sector has introduced speculative headwinds, with analysts noting potential delays in market share gains for U.S. producers. These factors have amplified risk-off sentiment in energy equities, dragging COP lower despite its strong technical indicators.

Oil & Gas Sector Under Pressure as XOM Trails COP’s Slide
While COP’s intraday drop is steeper than its sector leader Exxon Mobil (XOM)’s 1.98% decline, both stocks reflect the sector’s vulnerability to OPEC+ policy shifts and geopolitical risks. XOM’s relatively smaller decline suggests stronger short-term resilience, possibly due to its diversified upstream projects and recent strategic acquisitions. However, the broader sector faces a critical juncture as Saudi Arabia’s push for market share and India’s potential 50% cut in Russian oil imports create conflicting demand signals. COP’s sharp move underscores the sector’s sensitivity to macroeconomic headwinds, particularly as investors price in potential regulatory and geopolitical disruptions.

Bearish Options and Key Technical Levels to Watch in COP’s Volatile Move
• MACD: 1.43 (above signal line 1.03), RSI: 55.57 (neutral), Bollinger Bands: 98.63 (upper), 94.12 (middle), 89.60 (lower)
• 200-day average: 92.15 (near current price), Support/Resistance: 91.57–92.04 (200D), 96.68–96.94 (30D)
• COP’s price action suggests a bearish breakdown below key support levels, with RSI hovering near neutral territory and MACD indicating momentum divergence. The 200-day average at $92.15 acts as a critical psychological floor, while the 91.57–92.04 range could trigger further selling if breached.
• Top Options:
• COP20260116P92: Put option with 30.47% IV, 126.63% leverage ratio, delta -0.254, theta -0.0517, gamma 0.0669, turnover 6,084. High leverage and moderate delta position this as a strong bearish play with reasonable liquidity.
• COP20260116P92.5: Put option with 31.13% IV, 102.12% leverage ratio, delta -0.294, theta -0.055, gamma 0.0703, turnover 3,388. Slightly higher delta and gamma suggest enhanced sensitivity to price declines, making it ideal for aggressive short-term bearish bets.
• Payoff Analysis: Under a 5% downside scenario (COP at $89.73), COP20260116P92 yields $2.27 per contract (23.3% gain), while COP20260116P92.5 yields $2.82 (28.2% gain). These contracts offer asymmetric risk-reward profiles for bearish traders. Aggressive bulls may consider COP20260116C90 into a bounce above $94.12, but the immediate outlook favors short-side positioning.

Backtest Conocophillips Stock Performance
ConocoPhillips (COP) has demonstrated resilience in the face of a significant intraday plunge of approximately -3% from 2022 to the present. Here's an analysis of COP's performance during this period:1. Earnings Performance: COP's adjusted earnings per share for the first quarter of 2022 were $3.27, surpassing analysts' expectations. This marked a substantial improvement from the previous year's adjusted profit of $0.69 per share. Additionally, COP's quarterly free cash flow (FCF) was recorded at $1,907 million, and the company paid a quarterly dividend of $1.16 per share, yielding 3% annually.2. Stock Performance: Despite the -3% intraday plunge, COP has outperformed its peers and remains one of the best-performing stocks in its category, with a year-over-year increase of 87% in its stock price. The company's stock price has shown strong support, with potential low support levels at $76-$78.50.3. Dividend and Share Repurchases: COP's dividend is among the highest in its group, and the company has been actively repurchasing shares, as evidenced by the funds applied to share repurchases and the total proceeds since May 2021. This indicates a commitment to returning value to shareholders despite the market volatility.4. Market Conditions and Future Outlook: The rise in oil prices has been a significant factor in COP's performance. However, the outlook suggests that these price increases may not be sustainable and could potentially reverse by the fourth quarter of 2022. Additionally, the potential economic impacts of interest rate hikes and a possible recession could affect oil demand and, consequently, COP's stock price.In conclusion, while COP experienced a notable intraday plunge, the company's strong financials, including improved earnings and dividend payments, have supported its stock performance. The company's active share repurchases and the recent rise in oil prices have also contributed to its resilience. However, the uncertain market conditions and the potential for oil price fluctuations could impact COP's future performance.

COP’s 2.74% Drop Signals Sector-Wide Vulnerability: Key Levels to Watch Now
COP’s sharp intraday decline reflects the oil sector’s exposure to OPEC+ policy uncertainty and geopolitical risks, with technical indicators suggesting a potential breakdown below critical support. The 92.15–92.04 200-day average and 91.57–92.03 resistance range are pivotal for near-term direction. Investors should monitor the 52-week low of $79.88 as a hard stop, while sector leader XOM’s -1.98% move underscores the broader market’s fragility. For traders, COP20260116P92 and COP20260116P92.5 offer compelling bearish exposure, but caution is warranted as OPEC+’s Q1 2026 output stance and U.S. sanctions developments could trigger sharp reversals. Watch for a breakdown below $92.15 or a regulatory shift to dictate next steps.