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Energy (NYSEARCA:XLE) led the S&P sector standings by a wide margin Tuesday as crude oil prices extended gains on supply disruption risks from Iraqi Kurdistan and hopes the recent turmoil in the banking sector has been contained.
Front-month Nymex crude (CL1:COM) for May delivery settled +0.5% to $73.20/bbl, and May Brent crude (CO1:COM) closed +0.7% to $78.65/bbl, both hitting two-week highs.
U.S. natural gas prices continued lower, however, with Nymex natgas (NG1:COM) for April delivery ending -2.8% to $2.03/MMBtu, their lowest settlement since September 2020, weighed by forecasts for more moderate temperatures in much of the U.S.
ETFs: (NYSEARCA:USO), (BNO), (UCO), (SCO), (DBO), (USL), (DRIP), (GUSH), (USOI), (NRGU), (NYSEARCA:UNG), (UGAZF), (BOIL), (KOLD), (UNL), (FCG)
U.S. crude climbed more than 5% Monday after Iraq was forced to halt exports of ~450K bbl/day from its Kurdistan region through Turkey after an arbitration decision confirmed Iraq’s consent was needed to ship the oil.
Analysts at Barclays warned an extended disruption in Kurdish oil exports through the end of the year would imply a $3/bbl upside to their $92/bbl 2023 Brent price forecast for the full year.
A sustained recovery in Kurdish flows might depend on a resetting of oil revenue sharing terms between the Iraqi federal government and the Kurdistan regional government, which might be a complicated process, Barclays said.
Occidental Petroleum (OXY) was Tuesday’s top performer among major oil and gas stocks, +4.3%, after top shareholder Berkshire Hathaway bought nearly 3.7M shares in recent days.
