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energy stocks (NYSEARCA:XLE) rose as crude oil posted a sixth straight weekly gain after markets shrugged off OPEC’s modest production boost, which is unlikely to offset lost supplies from Russia and Russia Meet China’s growing demand as it eases COVID restrictions.
The group said it will increase production by 648,000 bbl/d in July and August instead of 432,000 bbl/d, as analysts say the increase could fall short of the amount promised as OPEC+ split the profit among its members and still included Russia, whose production is falling as sanctions have caused some countries to avoid buying its oil.
“The fact that Russia has remained in the group suggests that production from the alliance will continue to struggle to cope with even this modest increase,” say analysts at ANZ Research, noting that Russian production has since Already falling by 1 million barrels a day from their invasion of Ukraine is likely to fall further when the European Union’s ban on Russian oil comes into effect.
WTI crude for July delivery (CL1:COM) was up 3.3% on the week at $118.87/bbl, August Brent crude (CO1:COM) ended the week up 3.6 at 119.72 $ and Nymex July gasoline (XB1:COM) rose 8.7% in the week ending with a record $4.2522/gallon.
Supplies Remain Tight: The weekly US inventory report showed that inventories of crude oil fell more than expected and inventories of gasoline also fell.
Meanwhile, demand is rising and a potential resumption of consumption in China could push the price even higher.
Top 10 winners in energy and natural resources in the last 5 days: (NYSE: HUSA) +74.4%(NYSE:LPI) +39.9%(OBE) +28.2%(NINE) +27.7%(DRILL) +25.7%(STI) +24.9%(ESSV) +24.7%(GAS) +23.2%(PBF) +22.9%(MNTK) +22.8%.
Top 3 Energy and Natural Resources Declines in the Last 5 Days: (GFI) -17.2%(MTR) -11.8%(BOW) -11.8%.