Energy stocks bounce from pullback despite fade in oil prices

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Energy (XLE +3.1%) again stands at the top of the S&P sector standings even as crude oil futures fell more than 2%, extending the group's YTD gain to 35% as investors focus on mounting inflation fears despite crude's one-day reprieve.

April WTI crude (CL1:COM) closed -2.5% at $106.02/bbl after tumbling 12% on Wednesday, and May Brent (CO1:COM) settled -1.6% to $109.33/bbl after a 13.2% drop the day before; both benchmarks had closed Tuesday at nearly 14-year highs.

Halliburton (HAL +8.9%) and Baker Hughes (BKR +8.7%) finished as the top two gainers on the S&P 500, and Chevron (CVX +2.7%) hit an all-time intraday high of $174.76 before easing off but still finishing with a solid gain.

Other big winners Thursday included EOG +5.3%, FTI +4.3%, NOV +3.6%, COP +3.6%, PAA +3.4%, PXD +3.2%, XOM +3.1%, FANG +3.1%, VLO +2.8%, DVN +2.7%.

ETFs: USO, UCO, SCO, BNO, XOP, VDE, OIH

Oil turned lower "as investors become concerned that stagflation risks could deliver a big hit to the short-term crude demand outlook," Oanda's Ed Moya said. "The latest inflation report showed everything got more expensive and the war in Ukraine will likely keep this upward trajectory in prices well into the summer, which could lead to crude demand destruction."

Oil surged earlier this week to the highest since 2008, in part due to fears that the loss of Russian flows may stretch an already tight market, but prices plunged Wednesday after the United Arab Emirates signaled OPEC+ could boost production faster than planned.