Crude oil prices advanced, lifting the Dow and offering investors fresh results as a weekend OPEC+ oil supply glut rattled markets ahead of the start of the second quarter.
Shortly after the opening bell, the S&P 500 advanced 0.42%, the Dow Jones Industrial was up 1%, and the tech-heavy Nasdaq Composite was off 0.4%.
Crude oil was about 6% higher in early trade, with WTI crude – the U.S. benchmark near $80 a barrel, and the international benchmark, Brent crude, near the $85 mark per barrel.
Chevron stocks saw a rise of almost 5%, leading the Dow to lift the overall market at the start of the week.
On Sunday, the OPEC+ alliance announced a cutback of at least 1 million barrels of crude oil per day starting in May.
As concerns over acute financial instability worldwide eased, the dollar eased, and WTI advanced to nearly $10/barrel in the last two weeks of March.
The increase in oil prices may complicate the situation for the Federal Reserve, as they have already raised interest rates to combat inflation. The Federal Reserve’s favored inflation indices lower the prices of food and gas. However, growth in “headline” inflation involving energy costs could make it more difficult for the Fed to keep interest rate hikes off of their agenda this year.
U.S. natural gas prices fell last week
U.S. gas futures have fallen nearly 50% since the start of the year, a record quarterly drop driven by rising output and mostly mild weather and temperatures this winter.
But there is little chance of stopping product promotion. Meanwhile, U.S. gas inventory is about 22% higher than normal for this time of year.
Gas prices are asking the market to cut supply amid falling U.S. consumption and curbs on LNG exports.
COMMENTS