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Daily Updates | Oil and Petroleum Stocks Advance as Oil Prices Rise Following an Attack in the Red Sea

Oil and Petroleum Stocks Advance as Oil Prices Rise Following an Attack in the Red Sea

Oil and Petroleum Stocks

Oil stocks rose to the highest in two weeks as the price of crude oil soared amidst supply concerns following an attack on a tanker in the Red Sea that led to the rerouting of some tankers and shipments. 

The Dow Jones, NASDAQ, and S&P 500 were all higher. 

Valero Energy's (VLO) stock price was among the top in leading gains on the S&P 500, along with Marathon Petroleum(MPC) and Diamondback Energy(FANG). 

Nucor(NUE) and other steel manufacturers also rose after Nippon Steel agreed to buy U.S. Steel(X) in a $14.9 billion deal. Stocks of U.S. Steel also soared to new heights. 

Costco Wholesale(COST) shares also advanced for the second straight session after announcing a special dividend and reporting better-than-expected results. 

Rising oil prices had a negative impact on the shares of United Airlines(UAL) and other carriers. VF Corporation(VFC) shares also dipped as the owner of the North Face and Vans brands indicated a cyber attack was likely to have a “material impact” on business operations. 

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West Texas Intermediate advanced 1.5% and settled above $72/barrel at the highest since December 4. The prices spike as much as 4%. BP PLC said it will pause all shipments navigating through the Red Sea. Equinor AVA is also diverting shipments and vessels away from the region. Euronav NV, a major shipowner is also diverting its ships from the Red Sea, citing safety concerns. 

Rebecca Babin, a senior energy trader at CIBC Private Wealth said, “Approximately 8% to 10% of global crude flows through the Red Sea — most to Russia India, and China — which on a face value is not insignificant.”

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Key Takeaways

  • Oil industry stocks advanced from a rise in oil prices amid supply concerns after an attack on a supply tanker in the Red Sea. 
  • Shares of Steel providers soared after Nippon Steel bought U.S. Steel in a $14.9 billion deal. 
  • VF Corporation’s shares fell after it warned that a cyber attack would likely have a significant impact on its operations.

Source: Trading View