Diamondback Energy drops amid oil inventory build

Diamondback Energy fell 8.4% in morning trading on Wednesday as crude oil prices declined following data showing a large increase in U.S. oil inventories.

The American Petroleum Institute reported a surprise build of approximately 7.1 million barrels in U.S. crude stockpiles. The market had expected inventories to decline. The inventory increase pushed crude oil prices below $105 per barrel from recent multi-month highs.

Diamondback Energy derives nearly all its revenue from oil production in the Permian Basin, making the company sensitive to changes in crude prices.

Mizuho cut its price target on Diamondback Energy to $176 from $183 in the prior session while maintaining an outperform rating. The price target reduction has continued to affect investor sentiment.

Company executives have sold significant portions of their holdings in recent months.

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