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Upstream Stocks Saw Strong Buying Last Week

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Aug. 18 2020, Updated 6:24 a.m. ET

XOP rose 3.5% last week

Upstream energy stocks saw strong buying in the week ending September 14 amid sharp gains in crude oil prices. US crude oil went above $70 per barrel due to the bullish inventory report from the U.S. Energy Information Administration and Iran sanctions. The gains were partially offset by a decline due to concerns about how trade wars will impact global demand. Overall, US crude oil rose 1.8% and ended the week at $69 per barrel. On the other hand, US natural gas fell 0.3% and ended the week at $2.77 per MMBtu (million British thermal units).

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The SPDR S&P Oil & Gas Exploration & Production ETF (XOP), which includes 56 upstream companies, rose 3.5% last week. Among the top upstream stocks by market capitalization, ConocoPhillips (COP), EOG Resources (EOG), and Occidental Petroleum (OXY) rose 4.7%, 2.9%, and 1.2%, respectively, while Anadarko Petroleum (APC) fell 0.8%.

Will upstream stocks continue to rise this week?

The strong dollar and US-China trade dispute might weigh on crude oil prices this week. Iran sanctions and stronger-than-expected weekly inventory numbers might continue to drive the positive momentum in crude oil prices. Having said that, upstream energy stocks might continue to see high volatility in the near term.

Next, we’ll discuss the WTI Cushing-WTI Midland spread. We’ll see how the spread impacts upstream companies.

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