Oil Prices Jump to $99.83, Lifting Energy Shares But Not All

Oil prices surged on Thursday, pushing West Texas Intermediate (WTI) to $99.83 per barrel, a 3.9% increase. The jump in oil prices lifted energy shares in early trade.

The United States Oil Fund (USO), which tracks oil prices using futures contracts, rose 3.3% premarket. However, the State Street Energy Select Sector SPDR ETF (XLE) - a basket of big US energy companies - climbed only 1.5%. This disparity highlights the different sensitivities within the energy sector.

The split between oil and natural gas prices was evident elsewhere. US natural gas futures fell 1.6% to $2.78 per million British thermal units, while the United States Natural Gas Fund slipped 1.5%. Bloomberg reported that pipeline operator Energy Transfer plans to shift its primary listing from the New York Stock Exchange to the Texas Stock Exchange, adding a market-structure subplot to the day's events.

The difference in response between oil-linked funds and energy shares is due to their underlying mechanisms. USO is designed to follow commodity prices closely, so a sharp move in WTI tends to feed through quickly. In contrast, broad energy stock ETFs hold companies with different sensitivities, including producers that lock in prices ahead of time and integrated majors that see refining margins move the other way.