U.S. energy shares closed higher on Friday, propelled by a rise in crude oil prices following renewed geopolitical tensions in the Middle East. The sector, which has recently been focused on demand and oversupply dynamics, shifted its attention back to risk premiums associated with potential supply disruptions.
Key Movers and Market Data
Among major integrated oil companies, Exxon Mobil advanced 2.0%, ConocoPhillips rose 2.5%, and Occidental Petroleum gained 2.7%. Oilfield services firms also participated, with Halliburton jumping 3.3%. The international benchmark Brent crude settled at $68.05 per barrel, up 0.74%, while U.S. West Texas Intermediate (WTI) gained 0.41% to $63.55.
Refining equities found support after the United Steelworkers union reached a national labor agreement, averting a potential strike involving approximately 30,000 workers. However, a localized dispute continues at BP's Whiting refinery, where about 800 union workers claim the company is not adhering to the national framework.
Broader Market Context and Forward Risks
The sector's advance coincided with a broader market milestone, as the Dow Jones Industrial Average surpassed the 50,000 level. Analysts noted a potential rotation of capital into sectors like energy. Valero Energy notably outperformed many peers, surging 4.4%.
Market participants remain cautious, acknowledging that crude's risk premium could quickly dissipate if geopolitical tensions ease over the weekend. Traders are also monitoring fundamental data, with the next U.S. petroleum inventory report scheduled for February 11. The January Consumer Price Index (CPI) report, due February 13, is also on watch for its potential impact on interest rate expectations and the U.S. dollar, which influences commodity pricing.
