Crude oil and natural gas prices are both starting the new year with momentum, as geopolitics, cold weather and China's economic recovery are in focus. Natural gas plays EQT and Cheniere Energy are both near buy zones, while Occidental Petroleum is close to regaining a key technical level.
Oil prices climbed early Thursday to their highest level since October, but came off their highs after the Energy Information Administration reported a sixth straight weekly decline in storage levels, though smaller than forecast.
Crude Oil, Natural Gas Prices
West Texas Intermediate futures rose to 2.5% to $73.50 a barrel early Thursday, after earlier rising to $73.63, the highest level since mid-October. WTI hit a high for the year of near $87 in April.
Crude has been more or less range-bound below the October highs and lows around $67. But Thursday's move sparked by American Petroleum Institute data showed the commodity breaking out of its recent range.
API data released late Tuesday showed crude oil stockpiles fell by 1.442 million barrels in the week through Dec. 27, following a 3.2-million-barrel decline the prior week. Energy Information Administration data released at 11 a.m. today showed crude oil inventories down 1.2 million barrels, though some forecasters expected a 2.8-million drop.
Natural gas futures prices rose 1.8% to $3.70 per million Btu. Thursday's move carried natural gas prices clear of the January 2023 interim high.
Factors Boosting Energy Prices
Tighter industry supply data is just one of the factors lifting energy prices. Optimism for demand may have gotten a lift from Chinese President Xi Jinping's New Year's pledge to be more proactive in boosting economic growth.
Natural gas prices are climbing on predictions of the coldest January in perhaps a decade. Meanwhile, deliveries of Russian gas to Europe via Ukraine ended on Wednesday, which means European countries may look to the international market to replace portions of that supply.
EQT, LNG, OXY
Energy stocks, in general, have been through a long slog, but there are exceptions. Top independent U.S. natural gas producer EQT rose 0.2% to 46.22 in early Thursday stock market action. EQT had flashed an early entry on Monday, with a move past prior resistance at 46.31, but is struggling to hold that level on Thursday. EQT has an official 48.02 buy point from a six-week flat base.
Cheniere jumped 2.5% to 220.33. LNG stock flashed an early entry last week on a rebound off its 50-day moving average, but that move higher is now close to 6%. In addition, the stock's Composite Rating is a weak 61 and earnings have declined for the past four quarters, so caution is advised.
OXY climbed 1.9% to 50.35, retaking its 50-day moving average. OXY is still well below its 200-day line.
Among some other oil-focused plays, Devon Energy climbed 2.5%, Schlumberger 1.6% and Baker Hughes 1.4%. Baker Hughes is testing resistance at its 50-day moving average, five weeks into a flat base with a 45.17 entry.
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