DRIP - Crude oil gains with Brent best since April as market seen tightening in H2

2023-07-11 18:50:56 ET

Energy was Tuesday's easy winner on the S&P sector leaderboard, +2.2% with crude oil prices rebounding from the prior session's loss as expectations rise for the oil market to remain tight despite lingering growth concerns.

The U.S. Energy Information Administration now expects the global oil market to tighten this year , reversing its forecast and more closely aligning with bullish estimates by OPEC and the International Energy Agency.

A slight drop in global production growth will trim this year's global supply to 101.1M bbl/day, just shy of forecast world demand of 101.2M bbl/day, according to July's monthly report from the EIA.

The International Energy Agency had said the oil market should remain tight in this year's H2, anticipating strong demand from China and developing countries combined with recently announced supply cuts from Saudi Arabia and Russia.

Front-month Nymex crude oil ( CL1:COM ) for August delivery closed +2.5% to $74.83/bbl, its seventh gain in the past nine sessions and best settlement since May 1, and front-month September Brent crude ( CO1:COM ) ended +2.2% to $79.40/bbl, the highest finish since April 28.

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

The S&P energy sector ( NYSEARCA: XLE ) still remains down ~5% for the year, trading only ahead of utilities in the 2023 standings.

Tuesday's top energy performers among S&P 500 stocks were APA Corp. ( APA ) +6.2% for its best close since late April, SLB Corp. ( SLB ) +4.5% to its top finish since mid-February, and Halliburton ( HAL ) +4.2% for its highest since early March.

More analysis on crude oil:

• Oil Is Asymmetrically Positioned To The Upside
• USO: Improving Risk Appetite And Backwardation Point To Strong Total Returns
• Oil can Still Hit $100 Per Barrel And XLE Investors Can Benefit

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