On Friday oil futures hit a 29-month high. That took West Texas Intermediate to a gain of 8.5% in 2017 to date. However, energy stocks in the Standard & Poor’s 500 are off 9.8% when the S&P 500 itself is up more than 16% for 2017. Energy stocks normally go up when the price of oil rises Sp how do we explain the decline in energy shares at the same time as oil prices are rising?
Oil prices have bounced back today from yesterday’s tumble with West Texas Intermediate climbing 1.63% and the Brent international benchmark advancing 1.49% as of 11:45 a.m. New York time. The gain still leaves West Texas Intermediate below $50 a barrel at $48.50. The ostensible reason for today’s climb is a surprise drop in U.S. crude inventories of 237,000 barrels last week,
At the start of February, Bloomberg reports today, traders were long a net 865 million barrels of oil across the futures for West Texas Intermediate and Brent crude That was a record long position and a 78% increase since OPEC and 11 other producers had pledged at the end of November to cut their production beginning in January 2017.
