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Photograph by Chung Sung-Jun / Getty Images
The attack on Saudi Arabia's oil infrastructure has resulted in soaring oil prices and soaring oil stocks. It is therefore not surprising that the 12 best-performing stocks come from the energy sector. What is surprising: the less efficient is also a stock of energy.
The price of WTI crude oil rose 10% to $ 60.35 at 10:29 am today, while the Brent European benchmark rose 10% to $ 66.50. This increase has boosted the energy sector
SPDR Energy Select Sector
ETF (XLE) rose 2.4% to $ 62.53, while the
Dow Jones Industrial Average
lost 140.99 points, or 0.5%, to 27,078.53.
A quick look at the S & P 500's best-performing stocks reveals a who's who oil explorers and oil service stocks.
Apache
(APA),
Marathon oil
(MRO),
Helmerich & Payne
(HP) Hess (HES), Devon Energy (DVN), Halliburton (HAL), Diamondback Energy (FANG), ConocoPhillips (COP), Western Petroleum (OXY), Schlumberger (SLB), EOG Resources (EOG) and National Oilwell Varco (NOV) composes this list.
But a quick look at the worst of the S & P 500 also shows a stock of oil: Valero Energy (VLO). Valero, however, is not an explorer or stock of services benefiting from higher oil prices. It is an oil refiner, which recovers crude oil and converts it into other products. For Valero, oil is a cost, so higher prices are squeezing its margins, all other things being equal. Rising prices could also cause customers to reduce their expenses if Valero increases them too much.
"The moving [in oil prices] is problematic for refiners, as it will lead to price spikes and demand pressure as the market panics over oil risk, "writes Paul Sankey, a Mizuho analyst.
Without a doubt.
Write to Ben Levisohn at [email protected]
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