Oil Prices Surge Back Above $100, Energy Funds Follow
Oil prices surged once again, with US crude (WTI) rising 2.7% to $95.52 a barrel and Brent climbing back above $100 at $100.47.
This increase in oil prices had a ripple effect on energy funds, with the United States Oil Fund (USO) gaining 1.8% and the Energy Select Sector SPDR Fund (XLE), an ETF of large US energy companies, increasing by 1% premarket.
However, not all energy assets benefited from the price surge. Natural gas futures fell 2.2% to $2.85 per million British thermal units, causing the United States Natural Gas Fund (UNG) to decline 1.9%.
The divergence in energy prices highlights the complexity of the 'energy trade', which combines commodities and companies. The price of oil today can influence profits, costs, and deal headlines for energy companies, leading to independent movements in their stock prices.