NRGU - Crude oil energy stocks sizzle but not all analysts see $100 oil imminent

2023-04-03 15:55:48 ET

Energy ( NYSEARCA: XLE ) is the overwhelming leader on Monday's S&P 500 sector leaderboard, +4.6% , with crude oil spiking after Saudi Arabia and other OPEC+ producers unveiled a surprise decision to cut production by a combined 1.16M bbl/day.

Front-month Nymex crude ( CL1:COM ) scored its largest percentage gain in a year, +6.3% to $80.42/bbl, on top of last week's 9% surge , and front-month Brent crude ( CO1:COM ) also settled +6.3% for its best showing since March 2022, at $84.93/bbl.

Twelve of the day's top 15 gainers on the S&P 500 are in the oil and gas sector: Marathon Oil ( MRO ) +9.9% , ConocoPhillips ( COP ) +9.1% , APA Corp. ( APA ) +8.5% , Halliburton ( HAL ) +8.3% , Hess ( HES ) +8.2% , Schlumberger ( SLB ) +6.5% , Diamondback Energy ( FANG ) +6.4% , Exxon Mobil ( XOM ) +5.7% , EOG Resources ( EOG ) +5.7% , Devon Energy ( DVN ) +5.1% , Pioneer Natural Resources ( PXD ) +4.8% , Occidental Petroleum ( OXY ) +4.4% .

The day's move helps the sector recover most of its YTD loss, now just -1.5% for the year after falling 5.5% for the year at the end of Friday's session.

ETFs: ( XLE ), ( XOP ), ( VDE ), ( OIH ), ( XES ), ( IEZ ), ( NYSEARCA: USO ), ( BNO ), ( UCO ), ( DBO ), ( SCO ), ( USL ), ( DRIP ), ( GUSH ), ( USOI ), ( NRGU )

Goldman Sachs raised its forecast for Brent crude this year to $95/bbl and $100/bbl in 2024, noting OPEC+ "has very significant pricing power relative to the past, and [the] surprise cut is consistent with their new doctrine to act pre-emptively."

Not everyone agrees: Citi's global head of commodities research Ed Morse said the oil market would need much more uncertainty over supplies before prices could reach $100/bbl, telling Bloomberg, "There is a scenario for $100 oil, but I don't think we're anywhere near that yet."

For further details see: