Energy stocks managed once again to brush off the
market's doldrums. The S&P 500's energy sector is up 13% over the last
month. Every other sector is in negative territory over that period, with the
dividend-rich (and interest-rate sensitive) utilty sector taking the biggest
hit (down 8.0%).
So what's helping oil shake off the selloff? Quite
simply, energy is in short supply. Today the sector rose 1.6% after OPEC said
it would continue gradual production increases, rather than make a quicker
production bump.
The price of crude oil rose 2.3% on the day to
$77.72 a barrel. It's the highest settling price since Nov. 11, 2014 -- and
it's up nearly 120% in just 11 months. Natural gas prices are rising even more,
with my colleague Avi Salzman noting that
"storage tanks are depleted just as demand is rising in Asia and
Europe." Natural gas settled up 2.6% on the day and is now up 150% since
last December.
You can read more from Avi here.
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