COM - Energy producers top S&P sector leaderboard as crude oil continue to climb

2023-07-24 12:35:40 ET

Oil and gas ( NYSEARCA: XLE ) leads the S&P 500 sector standings by a wide margin Monday, +2% , as crude oil prices rose to near a three-month high on continued anticipation of tighter oil supply and Chinese stimulus moves.

West Texas and Brent benchmarks rose 2.2% and 1.5% respectively last week for their fourth straight of week of gains , as the latest round of supply cuts from Saudi Arabia and Russia appear to have finally tightened the oil market, with oil prices rallying nearly $8/bbl since the beginning of July.

Traders also are looking ahead to upcoming central bank decisions , with the Federal Reserve expected to indicate that interest rates in the U.S. have peaked following another rate hike and expectations that the People's Bank of China will unleash stimulus to support the Chinese economy.

The Fed will conclude its policy meeting on Wednesday, while policy decisions will be delivered by the European Central Bank on Thursday and the Bank of Japan on Friday.

Nymex crude oil ( CL1:COM ) for September delivery +2.4% to $78.95/bbl, and September Brent crude ( CO1:COM ) +2.2% to $82.84/bbl.

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

Among the day's noteworthy gainers in the sector: Halliburton ( HAL ) +3.5% , Hess ( HES ) +3.1% , Occidental Petroleum ( OXY ) +3% , Valero Energy ( VLO ) +3% .

Chevron ( CVX ) +2.5% after issuing preliminary guidance for better than expected Q2 earnings and announcing CEO Mike Wirth likely will stay in place for the next several years.

Crude oil's rise has reflected "tightening conditions as Saudi oil output cuts impact the market... even as summer demand has been somewhat stronger for gasoline and jet fuel," Citi said, seeing some upside for oil over the summer with a predicted Q3 average price of $83/bbl.

More analysis on crude oil:

• QQQE and XLE: Balanced ETF Strategy For The Next Phase Of This Bull Market
• Oil Can Still Hit $100 Per Barrel And XLE Investors Can Benefit
• USO: Crude Oil Spike Usually Appears At End Of Economic Cycle

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