COM - Crude oil energy stocks rebound after bullish U.S. inventory report

2023-06-28 16:50:45 ET

Energy ( NYSEARCA: XLE ) ended at the top of Wednesday's sector standings, +1% while the broader stock market finished flat, as a bigger than expected weekly draw for U.S. crude oil stockpiles offset concerns that further interest rate hikes could slow economic growth and reduce global oil demand.

The Energy Information Administration reported U.S. commercial crude inventories fell by 9.6M barrels for the week ended June 23, easily exceeding analyst forecasts and well above the average draw in the five years during 2018-22.

The report could mark a bottom for crude prices , with "very solid numbers that kind of fly in the face of people who have been saying that the market is oversupplied," according to Price Futures analyst Phil Flynn.

Front-month Nymex crude ( CL1:COM ) for August delivery closed +2.7% to $69.56/bbl, its highest settlement in a week, while August Brent crude ( CO1:COM ) ended +2.4% to $74.03/bbl.

ETFs: ( NYSEARCA: USO ), ( BNO ), ( UCO ), ( SCO ), ( DBO ), ( USL ), ( DRIP ), ( GUSH ), ( USOI ), ( NRGU )

Williams Cos. ( WMB ) was the day's best performer in the sector, +2.1% to hit its best level since mid-February, while other notable gainers included EOG Resources ( EOG ) +2% , Magellan Midstream Partners ( MMP ) +1.9% , Pioneer Natural Resources ( PXD ) +1.8% , ConocoPhillips ( COP ) +1.7% , Oneok ( OKE ) +1.7% .

J.P. Morgan analysts said in a new report that they do not see peak oil demand on the horizon, as energy transition technologies will fail to "move the needle" this decade.

Global oil demand should reach 106.9M bbl/day in 2030, up 7.1M bbl/day from 2022 levels, JPM said, adding that demand for all oil products will continue to increase except for gasoline, which will decline, and road diesel, which will plateau.

More on oil and gas:

• Russia Poised To Surpass Saudi Arabia As China's Top Oil Supplier
• Energy Stocks Underperform But Return Prospects Are Bright
• Oil Can Still Hit $100 Per Barrel And XLE Investors Can Benefit

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