ENERGY PRICES RISE AS OPEC DOESN'T BOOST OUTPUT -- DB ENERGY FUND RISES TO THREE-YEAR HIGH -- ENERGY SECTOR SPDR RISES TO TWO-MONTH HIGH -- SO DOES THE S&P OIL & GAS EXPLORATION AND PRODUCTION SPDR -- MARATHON PETROLEUM HITS NEW RECORD
INVESCO DB ENERGY FUND REACHES THREE-YEAR HIGH ... This past weekend's meeting between OPEC and Russia ended with no agreement to boost output to counter rising oil price. As a result, oil and other energy prices are rising sharply today. Chart 1 shows the Invesco DB Energy Fund (DBE) rising above its May peak to reach the highest level in three years. The DBE includes prices of light sweet crude and brent oil, as well as gasoline, heating oil, and natural gas. All of those energy prices are rising today. That's helping push energy shares sharply higher as well.
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Chart 1
ENERGY SECTOR ETFS ALSO TURN UP ... Energy stocks usually rise with the price oil. And they're doing that today. Chart 2 shows the Energy Sector SPDR (XLE) rising above its late August peak to the highest level in two months. That sets up a potential test of its early 2018 high which had reached the highest level in nearly four years. Chart 3 shows the S&P Oil & Gas Exploration & Production SPDR (XOP) turning up as well. Not surprisingly, most energy stocks are experiencing big percentage gains. The list of top gainers include Apache (3.6%), EOG (3.6%), and Marathon Petroleum (2.8%). Chart 4 shows the last stock trading at a new record high. The largest stock in the XLE is also having a potential breakout day.
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Chart 2
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Chart 3
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Chart 4
EXXON MOBIL MAY BE ON VERGE OF MAJOR BULLISH BREAKOUT... Exxon Mobil (XOM) is the largest stock in the XLE with a sector weight of 23%. As a result, its direction has a strong impact on the direction of the XLE. And today the trend of Exxon Mobil today is higher. The weekly bars in Chart 5 show XOM in the process of challenging its early 2018 intra-day peak at 86.62. A decisive close above that chart barrier would constitute an upside breakout. Friday's message showed XOM forming an "ascending triangle" pattern for the last four years which usually favors an upside breakout. A close above its January 2018 high would be a big step in that direction. And would be a vote for even higher energy prices.
