Crude oil prices rebounded Tuesday for a second consecutive day, amid optimism about a China reopening. Oil stocks such as Chevron also rose amid worries about supply outages following two earthquakes in Turkey.
West Texas Intermediate crude oil prices climbed 2.9% to $76.24 per barrel. Brent crude prices rose 2.2%, to $82.78 per barrel. Natural gas prices gained 2.1% to 2.51.
"The apparent success of China's transition from zero-Covid to living with it owes a lot to the rebound we're seeing," Craig Erlem, Oanda senior market analyst, wrote in a note early Tuesday. "A strong recovery will naturally drive much higher demand and competition."
Erlem said supply halts in Turkey may have also helped to lift oil prices. But the temporary suspension is likely to be lifted soon, he added.
Operations at a major oil export terminal were halted after a pair of major earthquakes early Monday. The death toll has now crossed 5,000.
On Sunday, the International Energy Agency (IEA) forecast record global oil demand in 2023.
China's economy is reopening, including the return of international travel, after the end of Beijing's harsh zero-Covid policy.
Oil Stocks Rise With Crude Oil Prices
Chevron gained 1.1% to 171.54 Tuesday, after edging up 0.1% Monday. CVX stock remains below the 50-day moving average after an earnings-related tumble in late January.
Exxon Mobil rose 1.7% to 113.62, after easing 0.2% Monday. XOM stock is above the 50-day line.
Among other oil majors, BP popped 6.4% Tuesday after reporting record fourth-quarter earnings. The company will also return its primary focus to oil and gas production, from renewables. BP stock jumped above its 50-day line and regained a 36.21 buy point.
Big oil companies recently reported strong Q4 earnings. That capped off a banner year for crude oil prices in 2022.
However, the start of 2023 has been marked by anxiety about the outlook for crude oil prices. The Energy Select Sector SPDR ETF, which tracks energy stocks, rose 2.8% for the month of January vs. a 6.3% gain for the S&P 500.
On Tuesday, the XLE ETF rallied 1.4% after four down days.
Several U.S. oil and gas explorers and producers, as well as refiners, also rallied following a down day Monday.
Occidental Petroleum advanced 2.4%, ConocoPhillips rose 1.5%. Phillips 66 gained 2.4%.
The mild rebound in oil prices this week comes as investors await Fed Chair Jerome Powell's speech Tuesday afternoon. That could offer clues on the trajectory of further rate hikes.
