The energy sector has become the best-performing of all 11 U.S. market sectors. Energy Select Sector SPDR ETF is up 46.2% in the year-to-date, making the broader market S&P 500’s 12% gain appear pedestrian. Oil Price have stabilized in the upper 60s with WTI Price finding support around $65 per barrel while Brent is seeing support around $67 per barrel.
Analysts widely expect OPEC+ to reaffirm at its meeting next Tuesday plans to unwind the cuts by 840,000 barrels per day (BPD) from July 1, signaling confidence that the market is well-positioned to absorb the additional supply as demand is rising with economies reopening. Russia estimates that the global Oil market is in a deficit of around 1 million bpd, Deputy Prime Minister Alexander Novak said on Wednesday.
According to AAA, Unleaded gasoline was selling at $3.04 per gallon on average Wednesday, more than 50% higher than a year ago. The U.S. industry is producing about 11 million barrels a day, down from about 13 million before the pandemic. Many analysts, however, are not sure how the fast U.S.However, Fattouh and Economou have warned that the market could flip into a surplus by the fourth quarter of 2022 if the U.S. shale growth hits the upper bound of 1.22 million barrels per day and global demand recovery turns out to be slower than expected.