- The S&P 500 energy sector (XLE +4.3%) is today's top performer, rebounding from Monday's 5.4% thud which followed a one-third increase in November through the 27th.
- Today's strength is backed by higher oil prices, with January WTI crude (CL1:COM) +2.3% to $45.60/bbl, the EIA's weekly inventory report that showed a 700K-barrel drawdown in oil stockpiles, and lingering optimism about a pickup in end demand in 2021 as the arrival of COVID vaccines helps global economies rebound.
- Four of today's top five gainers on the S&P 500 are oil and gas producers: APA +8.6%, HFC +8.5%, DVN +8.1%, OXY +8.1%.
- Other notable outperformers include MRO +7.1%, VLO +5.6%, PSX +4.6%, XOM +4.4%, CVX +4.3%.
- Word filtering out of OPEC+ talks indicate some headway toward a deal on oil production cuts after previously postponing an official meeting to discuss cuts.
- The "vibe appears to be a lot more diplomatic and delegates say that they are positive consensus will be reached tomorrow," tweets Amena Bakr, deputy bureau chief and chief OPEC correspondent at Energy Intelligence.
- OPEC+ likely will agree to extend current production cuts of 7.7M bbl/day by three months starting in January, says Tariq Zahir, managing member at Tyche Capital Advisors; if not, "we could see crude go substantially lower," as new lockdowns and the dramatic increase in COVID-19 in the U.S. hurt energy demand.
- ETFs: USO, XLE, UCO, XOP, VDE, GUSH, OIH, BGR, ERX, BNO