All it takes is a report that OPEC+, the group of oil-producing countries that includes Saudi Arabia and Russia, is considering a big cut in production at its meeting this week to send oil and oil stocks off to the races.
As of noon New York time, on Monday, U.S. benchmark West Texas Intermediate is up 4.21%, and international benchmark Brent crude is higher by 3.75%.
At the close shares of ConocoPhillips (COP) gained 7.46%; Pioneer Natural Resources (PXD) is up 6.89%; Equinor (EQNR) has climbed 4.41%. The U.S. Oil Fund ETF (USO) is higher by 4.00%.
Analysts are looking at cuts of up to 1 million barrels a day. That’s about 1% of global supply. Cuts of that magnitude would reverse a series of production increases that have trimmed oil prices by more than 26% since a peak in June. Analysts speculate that the Saudis appeared determined to bring oil prices up to about $90 a barrel. West Texas Intermediate is trading a little below $83 a barrel as of noon in New York.
Meanwhile, natural gas prices are moving in the other direction after a report from the International Energy Agency also predicted that global demand for natural gas would be weaker than previously expected. The drop would continue to be most pronounced in Europe, where high prices since Russia’s invasion of Ukraine have led to drops in consumption.
As of the close today the U.S. Natural Gas Fund ETF (UNG) was off 3.49%. Natural gas stocks, on the other hand, are higher with Cheniere Energy (LNG) up 0.86% and LNG export startup Tellurian (TELL) continuing to claw back some of last week’s horrendous losses with a gain of 9.62%.
The Energy Select Sector SPDR ETF (XLE) is up 5.65%.
