Energy stocks sizzle as crude closes historic weekly run at 13-year high (NYSEARCA:XLE)

Shares of oil and gas companies (NYSEARCA:XLE) soared 9.3% this week, marking the sector’s biggest weekly gain since October 2018, as crude oil prices rocketed past $115/bbl for the highest weekly dollar increase on record, sparked by fears of a major supply crunch from Russia’s invasion of Ukraine.

Front-month WTI crude (CL1:COM) settled +7.4% on Friday to $115.68/bbl, the highest closing price since September 2008 and capping a stunning $24/bbl, or 26%, gain for the week, as the brutality of Russia’s invasion became clear.

Natural gas futures (NG1:COM) +6.2% to a one-month high $5.02/MMBtu after European prices surged again on fears of shortages given Russia is a key supplier to the continent.

J.P. Morgan said this week that Brent crude could end the year at $185/bbl if Russian supply remains disrupted, and Goldman Sachs sees oil reaching $150 in the next three months without Russian barrels on the market.

“Any events which reduce supply such as stricter sanctions or damage to production/pipelines could spark another up leg” for oil prices, SIA Wealth Management chief market strategist Colin Cieszynski told MarketWatch.

Even as news reports said a renewed nuclear deal with Iran was near that might allow the country to resume exporting, investors remained focused on the global scramble for barrels of oil.

The Biden administration reportedly is considering a ban on U.S. imports of Russian oil, although Russian oil comprised only 3% of all crude shipments into the U.S. in 2021.

Occidental Petroleum soared 45% on the week, fueled by the oil rally with a big bump Friday as Moody’s upgraded the company’s debt rating to Ba1 from Ba2 with a positive outlook, saying “if oil and gas prices remain elevated in 2022, the company will generate significant free cash flow” and further reduce debt.

In an extraordinary week for commodities of all kinds, the week’s top 20 gainers in energy and natural resources: INDO +240.3%, MXC +97.1%, KLXE +69%, BTU +64.6%, IMPP +60.9%, OXY +44.9%, REGI +39.3%, IPI +36%, NFE +34.1%, ARCH +30.7%, NEXT +30.3%, METC +30%, TNP +28.5%, CENX +28.3%, HMY +28.2%, TALO +28.1%, RIG +27.3%, MNRL +25.6%, WTI +25.1%, KOS +25.1%.

Source: Barchart.com