US Energy Stocks Surge as Oil Prices Reach New Heights
US energy stocks are nearing a record high, driven by rising oil prices and fading hopes for a near-term US-Iran agreement. The S&P 500 Energy Sector Index gained up to 1.8% during trading on Tuesday, putting it on track for its first record close since March 27.
The index has rebounded around 20% since hitting a recent low on July 1, after energy shares had fallen 16% from their March peak amid easing hostilities and expectations of reduced disruptions in the Strait of Hormuz.
International benchmark Brent crude climbed to nearly $91 a barrel on Tuesday, its highest level in three weeks, while US benchmark West Texas Intermediate traded around $85. Oil prices have risen for three consecutive sessions, with Brent gaining roughly 50% since the beginning of the year due to Middle East conflict and supply constraints.
Higher commodity prices have significantly increased profits across the US energy industry, with Chevron's second-quarter earnings per share rising over 240% year-on-year, while ExxonMobil recorded a 115% increase. Exxon reported quarterly earnings of $14.5 billion, while Chevron posted a record $12.1 billion profit.
US refiners have also benefited from tight supplies and elevated margins, with Valero Energy reporting its most profitable quarter on record on a per-share basis, while PBF Energy and HF Sinclair posted their strongest earnings in years.