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The S&P 500 energy sector (NYSEARCA:XLE) closed at the top of Tuesday's stock market leaderboard by a wide margin, as U.S. and global benchmark crude oil futures settled at fresh highs for the year.
U.S. front-month Nymex crude (CL1:COM) for October delivery settled +1.8% to $88.84/bbl, its highest closing price since November 11, 2022, while front-month November Brent crude (CO1:COM) closed +1.5% at $92.06/bbl, its best settlement since November 16; the WTI and Brent benchmark indexes have gained 10.7% and 7.1% YTD, respectively.
ETFs: (NYSEARCA:USO), (BNO), (UCO), (SCO), (USL), (DBO), (DRIP), (GUSH), (USOI), (NRGU)
Seven of the day's top 15 gainers on the S&P 500 were in the oil and gas group: (OXY) +4%, (MRO) +3.7%, (EQT) +3.7%, (CTVA) +3.6%, (APA) +3%, (EOG) +3%, (XOM) +2.9%.
Bucking the sector trend, BP (BP) closed -1.3% after CEO Bernard Looney suddenly resigned.
The energy sector is the best performer among the S&P 500's 11 segments so far this quarter, up 14.5%, while the broader S&P has added less than 1%.
Tuesday's increase was attributed mostly to OPEC's optimistic monthly report that forecasts strong oil demand this year, even as Saudi Arabia and Russia continue to cut production.
OPEC stuck to its outlook for robust growth in global oil demand in 2023 and 2024, citing signs that major economies are stronger than expected; the group sees world oil demand rising by 2.25M bbl/day in 2024.
"Crude prices are rallying after the OPEC monthly report showed the oil market is going to be a lot tighter than initially thought," OANDA analyst Edward Moya said.
Also, the U.S. Energy Information Administration raised its 2023 and 2024 crude oil price forecasts, and said it expects global oil inventories will fall through the end of this year following Saudi Arabia's decision to extend its 1M bbl/day production cut through year-end.
More on crude oil futures
- USO: The Next Oil Bull Market May Have Begun
- The Saudis Are Dead Serious On Pushing Oil Prices Higher
- Energy Sector: Monetary Easing Will Probably Follow Soon And Lift The Oil Prices
- XOP And XLE: It's Time To Sell Some Energy Stocks And Reduce Risk
- End of fossil fuel era? IEA sees demand peaking before 2030