Oil prices are up 20% and energy stocks are rebounding | CNN Business

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Energy stocks are making a comeback after being left for dead earlier this year | Analysis

The S&P 500 index’s energy sector has gained more than 6% during the third quarter so far, outperforming the benchmark index. Energy stocks faltered in the beginning of the year, defying investors’ expectations for last year’s boom to accelerate on a lack of global supply. That drop in energy stocks came despite

producers, the cartel of oil producing countries plus Russia, announcing several output cuts in a bid to bump up crude prices. But energy stocks have finally started to gain in recent months. Saudi Arabia slashed its output by one million barrels per day in July — a move it extended Thursday through September. Those moves mark the country’s biggest production cut in years. That’s helped boost crude prices, which are hovering above $80 a barrel after dipping below $70 earlier this year.

is expected to keep its overall oil policy unchanged at a meeting Friday, Reuters reported. But the group will likely continue being vigilant in keeping oil prices higher, says Babin. That, along with an expected increase in demand as China works to revive its economy, could give more support to crude prices — though an economic slowdown could put downward pressure on prices.

 

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