The European Union has finally found a way to agree on a partial ban on oil imports from Russia. The group has agreed to an immediate ban on imports arriving by sea. That covers about two-thirds of Russian imports. To get Hungary’s vote for the partial ban, the EU agreed to exempt oil transported through the Druzhba pipeline.
International benchmark Brent crude surged past $120 a barrel Monday as China eased its anti-virus lockdowns, the European Union neared a plan to ban sea-borne oil imports of Russian crude, and U.S. drivers headed toward the summer travel season. U.S. markets were closed for Memorial Day but in electronic trading on the New York Mercantile Exchange West Texas Intermediate for July delivery was up 1.8% at 2:30 p.m. to $117.17 a barrel. Brent crude for July delivery rose $2.24 a barrel to $121.67. That was the highest close since March 8.
It’s likely that the current “disagreement” about how fast Russian oil production is falling will be resolved in favor of “pretty fast” despite spin from Moscow. Which would mean that Friday’s jump in oil prices–West Texas Intermediate crude gained 2.165 to $110.60 a barrel–will continue. And so will Friday’s rally in oil stocks. ConocoPhilips (COP), for example, was up 4.69% on Friday. Pioneer Natural Resources (PXD) gained 5.35%.
You don’t need to look in obscure, dark corners of the financial market for the reason for today’s big drop in oil prices. The IMF sharply cut its forecast for global growth today and China announced that it would keep its Zero Cover lockdowns in effect. A slower global and Chinese economies will lower global demand for oil. But… After pulling back to establish new positions, Russia has launched an intense bombardment all across Ukraine to soften up the country as Russia troops roll into Ukraine’s eastern region, the home of pro-Russian separatist governments. The new fighting promises to be even more vicious than the old fighting and already Ukraine’s Western supporters are looking for new sanctions to impose on Russia
U.S. benchmark West Texas Intermediate crude for May delivery climbed 1% to $108.01 a barrel at 10:09 a.m. Monday in Singapore. International benchmark Brent crude for June delivery gained 1.1% to $112.97 a barrel on the ICE Futures Europe exchange. Two Libyan ports have been forced to stop loading oil
We’ve had a pretty good dip over the last few days in oil prices. I think that comes from a trading pullback from a quick run-up in prices, as well as optimism that the war in Ukraine will not last as long as people had thought. The oil stocks I added to my portfolios in January have done quite well. In this video, I look at a few of them: ConocoPhillips (COP), Pioneer (PXD), Cheniere (LNG), Equinor (EQNR), and the Energy Sector SPDR (XLE). I think many of these are set to continue rising as we see continued gains in raw material prices; plus, it doesn’t hurt that some pay a healthy dividend as well!
Oil fell to the lowest level since mid-March today, April 6, after the International Energy Agency said its members will release an additional 60 million barrels of oil from emergency reserves
Today, March 31, OPEC+, which includes Russia, decided to stick with their previously agreed plan of modest monthly increases. Despite repeated asks from Washington and European countries to increase production in order to make up for shortfalls from Russia due to Western sanctions on that country as a result of its invasion of Ukraine, OPEC+ said it would increase oil output in May by 432,000 barrels a day, a slight uptick from the agreed increase of 400,000 barrels a day. The small increase–essentially no increase at all–would be for “technical reasons.” OPEC+ repeated its outlook for a month ago saying that the outlook was for “a well-balanced market” and that recent volatility in prices was “not caused by fundamentals, but by ongoing geopolitical developments.” Well, yeah. And isn’t that the point?
Hopes for a cease fire in Ukraine and for serious peace talks between Russia and Ukraine took the stock indexes up yesterday and the price of oil and oil stocks down. News of renewed Russian shelling today took the market back down and oil and oil stocks back up today.
Don’t sell those oil stocks yet! Back at the beginning of the year, I anticipated that coming conflict between Russia and the Ukraine would drive up the price of oil, and the stocks I added to my portfoliohene stocks (COP, EQNR, LNG) have all been up big. But, I don’t think it’s time to sell yet. Why? Summer. Summer is the big driving season in the Northern Hemisphere, and right now (in what’s called the “shoulder season”) reserves of gasoline are supposed to be replenished in anticipation of summer. But that’s not happening due to Russia-Ukraine, and I think with summer we will see prices for oil spike even higher. That’s why I wouldn’t sell these stocks yet. (And that’s despite of the selling today, March 28, on more lockdowns in China)
Oil rallied again today with U.S. benchmark West Texas Intermediate up 4.79% on the day to $114.79 a barrel and international benchmark Brent up 5.12% to $121.39 a barrel. So, natural, oil and gas equities stocks are up today. And the broader market is down. What else isn’t new?
Oil prices collapsed. And airlines reported better than expected pick up in traffic. So airline stocks soared with the most stressed operators showing the biggest gains in their shares. Delta Air Lines (DAL) closed up 8.70% on the day. United Airlines (ULA) picked up 9.19%. And American Airlines (AAL) gained 9.26%.
