Energy stocks defy broader market as supply worries lift crude prices
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Energy stocks (NYSEARCA:XLE
+1.7%) easily topped Wednesday's S&P sector leaderboard while the broader S&P 500 Index fell 1.2%, as May WTI crude oil (CL1:COM) closed +5.2% to $114.93/bbl, recovering its entire loss from yesterday, and May Brent crude (CO1:COM) settled +5.3% to $121.60/bbl.
Supply concerns linked to Russia's invasion of Ukraine again helped to drive crude's gains, with U.S. oil rising more than 11% and Brent surging nearly 13% YTD, and the S&P energy index extended this week's gain to 4.9%, attaining its highest intraday level since May 2015.
ETFs: NYSEARCA:USO, UCO, SCO, BNO, XOP, VDE, OIH, DRIP
Although most pulled back from highs of the day, some of the top gainers included NYSE:HES
+4.5%, FANG
+3.8%, MRO
+3.7%, SLB
+2.9%, BKR
+2.8%, HAL
+2.6%, EOG
+2.2%, VLO
+2%, RIG
+2%.
A major Black Sea oil export terminal could face weeks of disruption after Russia halted loadings, citing storm damage, potentially cutting oil exports by 1M bbl/day, further depriving the European market.
Also, U.S. crude stockpiles unexpectedly fell by 2.5M barrels last week, according to the Energy Information Administration.
"Oil will continue to go higher and any weakness should be bought," with the Russia situation and the market heading into driving season "all bullish factors," Tariq Zahir, managing member at Tyche Capital Advisors, told MarketWatch.
"Hess will grow at a pace that is faster than some technology companies," Long Player writes in a bullish analysis posted recently on Seeking Alpha.