Energy stocks finished in the middle of the pack this week, as crude oil prices pared their war-driven rally as sanctions on Russia so far avoid impacting the country’s oil and gas exports and did not block Russia’s access to the SWIFT financial system.
“It seems that the U.S. and its allies want to inflict pain on Russia but do not want to impede their ability to deliver energy products to the world,” TD Securities head of commodity strategy Bart Melek said.
April WTI futures (CL1:COM) fell 1.3% on Friday to end at $91.59/bbl, settling +1.5% for the week after Thursday’s intraday high of $100.54, while April Brent crude (CO1:COM) closed +4.7% for the week at $97.93/bbl after spiking to $105.79 after initial news of Russia’s invasion of Ukraine.
Most-active natural gas futures (NG1:COM) fell 3.7% Friday to $4.470/MMBtu on Friday, as the invasion failed to disrupt European supplies from Russia, but +2.1% for the week.
Further oil price volatility still looms, Oanda says, since “taking over Kiev would be followed by a strong reaction from Western leaders, which should suggest all sanctions remain on the table, including Russia crude oil and gas.”
A deal among OPEC oil producers plus Russia reportedly shows no cracks so far, and the group is expected to stick to its planned production rise of 400K bbl/day in April.
Also, speculation is rising that Iran could be restored to the global nuclear accord, which would quickly add 1.5M-2M bbl/day of crude to the market, according to Commerzbank’s Carsten Fritsch.
Energy stocks (NYSEARCA:XLE) ended the week +1.2% after sinking to the bottom’s of the S&P sector standings a week ago, which followed three straight weeks at the top of the leaderboard.
The week’s top 5 gainers in energy and natural resources: IMPP +300%, INDO +154.9%, REPX +40.8%, SJI +39.4%, SND +38.2%.
The week’s top 5 decliners in energy and natural resources: SMLP -27.5%, WFRD -19.8%, OIS -19%, STEM -18.9%, HFC -17.1%.