Crude oil at $80 pushes energy stocks to week's biggest gains
Jan. 07, 2022 6:45 PM ET Energy Select Sector SPDR ETF (XLE), CL1:COM, NEX CO1:COM, ESTE, BPT, REI, HPK, LBRT, PBF, RES, KOS, KLXE, VDE By: Carl Surran, SA News Editor 32 Comments
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Crude oil futures closed lower Friday but rallied ~5% for the week, boosted by a confluence of events including unrest in Kazakhstan, pipeline maintenance in Libya, and a deep freeze in Canada and the northern U.S. that threaten to add to supply outages.
Kazakhstan is worrisome because it exports 1.5M bbl/day of oil and "the violence is near the oil producing center,"
Michael Lynch, president at Strategic Energy & Economic Research, tells MarketWatch.OPEC+ confirmed plans to increase oil supplies by 400K bbl/day next month, although a Reuters survey showed production missed targets during December.
WTI February crude ( CL1:COM) closed Friday -0.7% at $78.90/bbl, but the front-month contract still jumped 4.9% for the week, while March Brent crude ( CO1:COM) rose 5.1% on the week to settle at $81.75/bbl.
The rebound in energy prices could be reaching levels that would prompt a substantial increase in oil drilling, according to a quarterly survey by the Federal Reserve Bank of Kansas City, which says energy firms it surveyed would need to see crude oil at $73/bbl before they ramp up drilling.
Oil executives at this week's Goldman Sachs energy conference said they would maintain financial discipline with lower capex and higher shareholder returns - with one possible exception
Energy was the week's top S&P sector performer, +10.6%, with the Energy Select Sector SPDR ETF (NYSEARCA: XLE) and Vanguard Energy ETF (NYSEARCA: VDE) hitting all-time highs Friday. |
