Oil prices bounced again Friday ending a tumultuous week amid uncertainty around the Israel-Hamas war and possible Iran involvement, tightened U.S. sanctions on Russian oil price violations and a bearish surge inU.S. crude oil stockpiles. Energy stocks, including ExxonMobil and Chevron angled higher Friday.
U.S. crude oil prices jumped 5.6% to more than $87 per barrel Friday. That put prices about 5% higher for the week, but still well below WTI's September high above $93 per barrel. On Thursday, official data showed U.S. crude inventories jumped by 10.176 million barrels last week, the largest increase since February.
Also on Thursday, the U.S. imposed sanctions on two shipping companies for violating the G-7's $60 per barrel price cap on Russian oil.
"We reiterate our strong commitment to imposing sanctions and other economic measures against Russia in response to its illegal, unjustifiable and unprovoked war," the group said in a join statement.
Israel-Hamas And Oil Prices
The stockpiles news would typically pressure WTI oil prices lower. The Russia sanctions news implied a possible disruption of global trade relationships, which could help pressure prices for both Brent crude and WTI higher.
Meanwhile, oil traders closely monitored developments in the Middle East and the potential for increased sanctions against Iran.
Morgan Stanley analyst Martijn Rats wrote Monday that "neither Israel nor its direct neighbors are large oil producers, and hence we judge the near-term risk to oil supply as limited."
"That could change, depending on how the conflict develops," Rats added.
Treasury Secretary Janet Yellen told reporters earlier this week the Treasury Department continues to review its sanctions on Iran, Hamas and Hezbollah, the Lebanon-based militant group.
"We have not in any way relaxed our sanctions on Iranian oil," Yellen told the New York Times. "We have sanctions on Hamas, on Hezbollah, and this is something that we have been constantly looking at and using information as it becomes available to tighten sanctions."
U.S. And Iran
Iran crude oil has been reentering the global market in recent years as U.S.-Iran negotiations over uranium enrichment and economic sanctions has dragged on.
Estimates put exports of Iran's heavy sour crude around 2 million barrels per day. In 2018, President Donald Trump pulled out of the 2015 U.S.-Iran nuclear deal and reimplemented sanctions that reduced Iran crude oil sales to around 400,000 barrels per day by 2020.
The Wall Street Journal reported Thursday the U.S. and Qatar agreed to deny Iran access to $6 billion in oil proceeds, proceeds from oil sales to South Korea and previously frozen South Korean banks. In September, as part of a prisoner swap agreement, the U.S. had shifted the funds to banks in Qatar, to be managed by Qatari officials for use in Iranian humanitarian efforts, according to the WSJ.
ExxonMobil Stock: Strong Week For Oil And Gas Stocks
Out of the 197 industries tracked by IBD, oil and gas sector groups posted four of the top five gains for the week through Thursday as oil prices churned.
On Friday, ExxonMobil stock gained 3.2% to 109.90 in market action. On the week the energy giant jumped 2.5% after confirming Wednesday it would buy Pioneer Natural Resources for nearly $60 billion.
PXD stock advanced 3.4% Friday. Frontline, the oil tanker giant, angled 1% higher Friday after already surging around 12% on the week. The company outlined Tuesday it entered into an agreement with Euronav to acquire 24 very large crude carriers at a total cost of $2.35 billion, becoming the largest publicly traded tanker company by carrying capacity.
Meanwhile, along with XOM, Chevron stock also gained 1.8% with oilfield services firm Halliburton jumping 1.7%. On the week, HAL gained 9.7%.
ExxonMobil stock has a 60 Composite Rating out of a best-possible 99. The energy stock has a 62 Relative Strength Rating. ExxonMobil stock also has a 32 EPS Rating.
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