Energy stocks were lower Monday afternoon, with the NYSE Energy Sector Index decreasing 0.5% and the State Street Energy Select Sector SPDR ETF (XLE) shedding 0.8%.
The Philadelphia Oil Service Sector Index was falling 4%, and the Dow Jones US Utilities Index was down 1%.
Oil prices rose Monday after Iran claimed to have destroyed an advanced US drone over the Strait of Hormuz. Oil prices have jumped more than 20% so far this month after notching gains in both August and July, fueling global inflation concerns. The Islamic Revolutionary Guard Corps said it destroyed an advanced MQ-1 drone over the Strait of Hormuz, a key crude and energy chokepoint, CNBC reported.
Separately, President Donald Trump said Monday that Iran wants to reach a deal with Washington. "The failing Nation of Iran wants to make a deal, quickly and badly. I will determine whether or not the U.S.A. will choose to engage - The concept of which we are open to," Trump wrote in a social media post on Truth Social.
Front-month West Texas Intermediate crude oil rose 1.4% to $101.53 a barrel, and the global benchmark Brent crude contract added 1.1% to $105.79 a barrel. Henry Hub natural gas futures added 2.4% to $2.90 per 1 million BTU.
In corporate news, Chevron (CVX) is considering expanding its global gas portfolio to the Mediterranean and Argentina to meet growing demand amid the crisis in the Middle East, Reuters reported, citing the President of Global Gas, Freeman Shaheen. Separately, Chevron Australia President Balaji Krishnamurthy told Bloomberg TV in an interview that liquefied natural gas prices are unlikely to come down over the next six months or so. Krishnamurthy also said the US-Iran war has led customers to increasingly seek long-term supply contracts. Chevron shares were down 0.2%.
Venture Global (VG) and China Gas have signed a new agreement for the purchase of 0.5 million tonnes per annum of US liquefied natural gas for 20 years, beginning in 2030, the companies said Monday. Venture Global shares were down 2%.
YPF (YPF) is nearing two to three liquefied natural gas sales contracts totaling 500,000 to 1.5 million metric tons annually for its proposed $24 billion export project, Bloomberg reported, citing Chief Executive Horacio Marin. YPF shares rose 1.2%.