The recent attack on Israel by Hamas has had a significant impact on oil stocks, leading to a surge in crude oil prices. The Energy Select Sector SPDR ETF (XLE) experienced a notable jump of 2.2% in premarket trading. All components of the ETF that traded saw gains, indicating a broad boost in the industry.
Chevron Corp., one of the prominent players in the energy sector, saw its stock climb by 2.4%, making it the leader among premarket gainers in the Dow Jones Industrial Average (DJIA). Other active members of energy ETFs also saw positive movement. Occidental Petroleum Corp. (OXY) experienced a rise of 3.2%, Exxon Mobil Corp. (XOM) advanced by 2.8%, while Schlumberger Ltd. (SLB) and Devon Energy Corp. (DVN) both rallied with gains of 3.2%.
In tandem with the stock market activity, crude oil futures increased by 3.4% and reached $85.60. This rise comes after a continuous decline over seven sessions, during which the prices plummeted by 11.6%. Crude oil closed at a 13-month high of $93.68 on September 27.
Kurt Hallead, an analyst at Benchmark, does not anticipate any impact on agreements between the United States and Saudi Arabia concerning oil supply and prices due to the events in Israel. Furthermore, he believes that the Saudis will continue to facilitate a “soft landing for oil” within the range of $70 to $90 per barrel.
This surge in oil stocks and crude oil prices signifies the market’s responsiveness to geopolitical events and the delicate balance of supply and demand. The energy sector continues to be an area of interest for investors seeking opportunities in an ever-evolving global landscape.