Energy leads sector standings as crude oil closes higher in late surge
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Energy (NYSEARCA:XLE) tops the S&P sector leaderboard Monday as crude oil prices ticked higher into the close, with WTI crude settling higher after tumbling last week to its lowest level since December 2021.
Front-month Nymex crude (CL1:COM) for April delivery jumped in late trading after languishing in the red for most of the session, settling +1.3% to $67.64/bbl, although still the benchmark's third lowest settlement value this year; May Brent crude (CO1:COM) closed +1.1% to $73.79/bbl.
Even with today's 2% gain so far, the energy sector remains down 6.8% for the month compared with a less than 1% drop so far this month on the S&P 500.
Among Monday's noteworthy gainers in the oil and gas group: APA Corp. (APA) +3.5%, Schlumberger (SLB) +3.2%, Hess (HES) +3%, Marathon Oil (MRO) +2.9%, EOG Resources (EOG) +2.7%, Halliburton (HAL) +2.5%, Pioneer Natural Resources (PXD) +2.4%, EQT Corp. (EQT) +2.3%, Diamondback Energy (FANG) +2.2%, Valero Energy (VLO) +2.2%, Chevron (CVX) +2.2%, Exxon Mobil (XOM) +2%.
Among smaller oil and gas producers: Talos Energy (TALO) +9.1%, Matador Resources (MTDR) +4.8%, Magnolia Oil & Gas (MGY) +4.5%, PDC Energy (PDCE) +4.3%.
ETFs: (XLE), (NYSEARCA:XOP), (VDE), (OIH), (NYSEARCA:USO), (BNO), (UCO), (SCO), (DBO), (USL), (DRIP), (GUSH), (USOI), (NRGU)
Crude prices currently have little relation to supply and demand fundamentals, driven by macro worries, and "short sellers can ride that wave until the general level of risk appetite show signs of stabilizing," Saxo Bank's Ole Hansen said.
Even Goldman Sachs Group no longer sees oil reaching $100/bbl this year, cutting its forecast for Brent crude over the coming 12 months to $94 as near-term recession fears rise.
"Oil prices have plunged despite the China demand boom given banking stress, recession fears and an exodus of investor flows," Goldman said, adding that historically, "after such scarring events, positioning and prices recover only gradually, especially long-dated prices."
"Oil is crashing and could fall more," Pacifica Yield writes in an analysis newly published on Seeking Alpha.