Oil & gas drilling and exploration stocks were a dominant force in the basic materials sector by midday trading on Thursday, after the US Energy Information Administration released data indicating that crude inventories dropped for the fourth time in a five-week period.
WTI futures were up over 1 percent as the EIA said that reserves dropped by nearly 2 million barrels last week. Contracts for October delivery advanced to $108.39 per barrel on the NYMEX, while Brent for delivery along the same timeline had risen to $115.25 per barrel on London’s ICE Futures Europe exchange.
The shrinking stockpiles are significant because they come at a time when crude production has actually increased. The EIA also said that output last week was up 0.2 percent to 7.6 million barrels a day in the US, making for the highest production figures since 1989.
Both the higher price of crude as well as the bump for independent drillers can be attributed to an industry-wide realignment toward the plentiful reserves of shale oil that have been and continue to be discovered throughout the US. However, the rise in price-per-barrel has also been the result of uncertainty ahead of a looming congressional vote on US military strikes against Syria, which has investors concerned about the potential for that country’s chaos to spill over its borders.
Ahead of the closing bell, Cheniere Energy ($LNG), Rowan Companies (RDC) , Atwood Oceanics (ATW) , Concho Resources (CXO) , and Patterson-UTI (PTEN) made up the five best-performing drilling and exploration companies.
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