As oil spikes, energy stocks again lead US markets
The S&P 500’s energy stocks (Energy Select Sector SPDR Fund) are some of the few bright spots in the blue-chip index Thursday, after continued US and Israeli bombing, and renewed Iranian attacks on energy infrastructure throughout the Middle East diminished hopes that the Islamic Republic’s military action to disrupt the flow of oil and gas out of the Gulf would quickly peter out.
“There are no signs that either the US and Israeli attacks or the Iranian retaliatory missile and drone strikes are slowing down,” Arne Lohmann Rasmussen, chief analyst at Global Risk Management, told reporters for Platt’s Commodity News early Thursday.
US gas drillers such as APA Corporation, Devon Energy, and Coterra Energy are seeing sizable gains as Qatar Energy’s ongoing shutdown of liquefied natural gas production has sent global gas prices soaring. Qatar Energy fully shut down gas liquefaction on Wednesday. It is unclear when it will resume liquefaction, but once it does, it will take a month for Qatar’s LNG production to hit peak capacity again.
US crude oil prices are also on the rise, with NYMEX continuous futures on West Texas Intermediate — the US oil benchmark — up to over $78 shortly after 10 a.m. ET. That’s the highest since the start of the war and the highest price for US crude since early 2025.
Indeed, oil market participants are currently putting almost as big a premium for a barrel of Brent crude delivered as soon as possible relative to future delivery as they did during the energy shock that followed Russia’s 2022 invasion of Ukraine.
The surge in energy prices in recent months — amid US interventions first in Venezuela and now Iran — has turned energy stocks into the biggest winner of the year among the S&P 500’s 11 so-called industry “sectors.”
The rise in crude bodes poorly for US gasoline prices, but it’s a boon to US refiners and marketers: Valero and Phillips 66 are posting solid gains on the day.
Airlines, sensitive to short-term swings in fuel prices, also fell. Budget airlines including Allegiant and Frontier were down more than 6%. Delta Air Lines, United Airlines, and American Airlines were all down more than 5%.
And since gasoline prices will mechanically work as a tax on consumption, it’s unsurprising to see that Thursday’s biggest losers early were consumer staples stocks, with that sector (Consumer Staples Select Sector SPDR Fund) down more than 2%.
Walmart and Dollar General — whose less affluent customers can be especially sensitive to higher gasoline prices — was leading the charge lower there.
