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By Alex
Eule | Tuesday, June 1 Energized. Energy
markets were the center of attention today, with crude oil rising
2.1%, to settle at $67.72 a barrel, its highest level since October
2018. Multiple factors are pushing oil higher, including a forecast from
OPEC, or the Organization of the Petroleum Exporting Countries, that oil
demand could increase by six million barrels a day during the
second half of the year. A
pandemic-driven glut of extra oil, meanwhile, has now shrunk. Avi
Salzman wrote today
that oil inventories "now appear to be on pace to fall below historical
averages by next month—a remarkable shift that points to shortages instead of
surpluses in the market." Energy
stocks surged, as well, with the S&P energy sector rising 3.9%, led by
13%-plus gains from Devon Energy and Marathon
Oil. Energy is the best performing
sector so far in 2021, up 38% on the year. There could be
more gains to come. Here's Avi: Some
analysts think stocks have more room to run. Tudor Pickering Holt analysts
say that upstream companies (that is, producers) are up about 75% this year,
versus 12% for the S&P 500. Nonetheless, “we continue to remain
long on equity exposure as fundamentals continue to support high commodity
prices for crude, natural gas liquids, and natural gas over the next six
months,” they write. Outside of
energy, stocks were fairly quiet. The S&P
500 was
down two points, or 0.05%, while the Dow
Jones Industrial Average edged up 46 points. The
so-called meme stocks continue to keep things exciting, though. AMC
Entertainment jumped another 23%. While the meme stocks
don't need actual catalysts for big moves, AMC today did have some actual
tailwinds: Americans may finally be returning to movie theaters in decent
numbers, and the company was able to raise significant cash through
a stock offering. Those funds could help the company regain its
footing as the economy reopens. Connor Smith has more on AMC's big day here.
BlackBerry and GameStop were up big as well. |
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DJIA: +0.13% to 34,575.31 The Hot
Stock: Devon Energy +13.7% Best Sector:
Energy +3.9%
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