NRGU - Oil and gas stocks surge as crude climbs for second straight day

2023-03-21 12:35:22 ET

Energy ( NYSEARCA: XLE ) again is the top performer of the 11 S&P industry sectors Tuesday, +2.8% , as crude oil continues higher after ending last week at a 15-month low on worries over the banking sector.

Worries about a banking collapse have eased this week, and crude is climbing for the second straight day; front-month WTI April crude ( CL1:COM ) +1.7% to $68.80/bbl, and May Brent crude ( CO1:COM ) +1.3% to $74.75/bbl.

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

Among stocks on the move: APA Corp. ( APA ) +5.2% , Marathon Oil ( MRO ) +4.3% , Schlumberger ( SLB ) +3.8% , Exxon Mobil ( XOM ) +3.7% , Diamondback Energy ( FANG ) +3.5% , Halliburton ( HAL ) +3.5% , ConocoPhillips ( COP ) +3.5% .

The Federal Reserve is expected to raise its benchmark interest rate by 25 basis points Wednesday, but "if the Fed pauses rate hikes, oil will likely run tomorrow. If the Fed sticks with its original plan of a 50-basis point increase, the oil will likely slide further," according to StoneX's Alex Hodes.

Last week's slide in oil prices due to banking jitters is speculative, and crude will hit $140/bbl by the end of the year , hedge fund manager Pierre Andurand of Andurand Capital said Tuesday at the FT Commodities Global Summit in Switzerland.

Crude oil demand will peak around 2030, Andurand said, but "even when we peak, oil demand won't fall down so fast. We will reach peak demand towards 110M bbl/day and then a slow decline from there."

Citing elevated recession fears, Goldman Sachs no longer sees oil reaching $100/bbl this year, cutting its forecast for Brent crude over the coming 12 months to $94/bbl .

For further details see: