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Sector Update: Energy Stocks Gain Wednesday Afternoon

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Energy stocks were higher Wednesday afternoon, with the NYSE Energy Sector Index rising 1.3% and the State Street Energy Select Sector SPDR ETF (XLE) adding 1.1%.

The Philadelphia Oil Service Sector Index was climbing 1.9%, and the Dow Jones US Utilities Index was decreasing 0.4%.

Crude oil prices jumped after President Donald Trump threatened additional strikes against Iran tonight, saying the ceasefire with Tehran was over. The US struck Iran on Tuesday after Tehran attacked three tankers that crossed the Strait of Hormuz. Iran's Islamic Revolutionary Guard Corps hit US military targets across Bahrain and Kuwait in retaliation to Washington's attacks, CNN reported. The US will likely hit Iran again tonight, Trump said Wednesday at a NATO summit in Turkey.

Front-month West Texas Intermediate crude oil jumped 6.1% to $74.72 a barrel, and the global benchmark Brent crude contract climbed 6.6% to $79.08 a barrel. Henry Hub natural gas futures fell 1.3% to $3.22 per 1 million BTU.

US crude oil stocks, including those in the Strategic Petroleum Reserve, fell by 3.2 million barrels in the week ended July 3 following a decrease of 9.3 million barrels in the previous week. Excluding inventories in the SPR, commercial crude oil stocks rose by 3.0 million barrels after a 3.8-million-barrel decline in the previous week, compared with a 1.9-million-barrel drop expected in a survey compiled by Bloomberg.

In corporate news, Chevron (CVX) unit Chevron Technical Center and ZL Chemicals signed a technology licensing deal that allows ZL Chemicals to commercialize Chevron-developed chemical surfactant technology, the companies said Wednesday. Chevron shares were up 1%.

Baker Hughes (BKR) will provide power generation services to support Kodiak Gas Services' (KGS) energy infrastructure initiatives under a new multiyear agreement, the companies said. Baker Hughes shares climbed 4.1%.

Petrobras (PBR) has signed a settlement agreement with Brazil's oil regulator ANP to bring 335 offshore wells into compliance with well integrity regulations by Dec. 31, 2030, according to a translation of a statement from the regulator. Petrobras shares rose 2.8%.

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