Energy stocks score best week since March as oil prices ride Middle East tensions

Crude oil futures settled Friday at their highest levels in more than two months, as continued escalation of tensions in the Middle East and production glitches in the U.S. drove the domestic price to its largest two-week gain since September – before the start of the Israel-Hamas war in Gaza.

Prices had traded lower early Friday but rebounded after an oil tanker was struck by a missile after transiting the Red Sea, the latest attack by Houthi terrorists in Yemen that have disrupted shipping in the region.

A host of other factors added support for oil: U.S. oil supply and production drawdowns that were much larger than forecast, the prospect of more economic stimulus from China, stronger than expected Q4 GDP growth in the U.S., continuing declines in U.S. inflation, and a Ukraine drone attack on a Russian oil refinery.

But oil prices “remain supported above all by geopolitical risks,” Commerzank analysts said.

Front-month Nymex crude (CL1:COM) for March delivery ended +0.8% Friday and up 6.5% for the week to $78.01/bbl, its highest settlement value since November 14 and capping its largest two-week percentage gain since the week ending September 8; Brent crude (CO1:COM) was almost as strong this week, finishing 6.3% higher at $83.55/bbl.

ETFs: (USO), (BNO), (UCO), (SCO), (USL), (DBO), (DRIP), (GUSH), (NRGU), (USOI)

The S&P 500 Energy Index (NYSEARCA:XLE) scored its biggest weekly gain since March, +5.1%, highlighted by NuStar Energy (NS), which was bought by Sunoco in an all-stock deal valued at ~$7.3B.

Top 10 gainers in energy and natural resources during the past 5 days: NuScale Power (SMR) +38.2%, Verde Clean Fuels (VGAS) +27.5%, Plug Power (PLUG) +26.8%, W&T Offshore (WTI) +24.4%, NuStar Energy (NS) +19.6%, Nabors Industries (NBR) +14.7%, Liberty Energy (LBRT) +14.3%, RPC Inc. (RES) +14.2%, PBF Energy (PBF) +13.6%, YPF (YPF) +13.2%.

Top 5 decliners in energy and natural resources during the past 5 days: Battalion Oil (BATL) -30.1%, Novagold Resources (NG) -20.9%, Global Gas (HGAS) -14.4%, Brooge Energy (BROG) -12.2%, Chart Industries (GTLS) -12.2%.

Source: Barchart.com