3 Oil & Gas Stocks Most Sensitive To Oil Price Swings

By Alex Kimani
click here to read the original article at Oilprice.com
*this article was not written by Roseland Oil & Gas

Following a strong rally amid escalating tensions in the Middle East, oil prices have pulled back sharply in the current week as demand worries outweigh geopolitical concerns. WTI crude for May delivery has declined 5.1% from the Friday close to trade at $83.15 per barrel while Brent crude June contract has retreated 4.9% to change hands at $87.50, marking the first time it has slipped under $90 in more than a week.

However, several commodity analysts believe the markets are unduly discounting the risk of a full-blow war between Iran and Israel. According to Standard Chartered, Iran’s revised position is that any future attacks on Iranian interests anywhere will draw significant retaliation, with the IRGC seizure of a cargo ship on 13 April intended as a related signal of Iran’s ability to influence regional shipping flows. StanChart has warned that the market is understating the risk of further escalation due to miscalculation, miscommunication or other human error. Meanwhile, oil prices have declined after U.S. House of Representatives Speaker Mike Johnson lined up four bills providing assistance to Ukraine, Israel and the Indo-Pacific. Bank of America estimates that an all-out war between the two countries could lead to a $30-$40 spike in the price of crude.

“The market was waiting to sell off on indications of calming of tensions in the Middle East … progress on these bills and a three-day delay in Israel’s response to Iran is helping today,” John Kilduff, partner at Again Capital LLC, told CNBC.

“We’re leaving our price forecasts unchanged for now and still expect ICE Brent to average US$96 over the second half of this year. The macro outlook continues to be a more important driver for prices than fundamentals at the moment,” analysts at ING have said.

Bank of America has analyzed stocks in the MSCI AC World Index (ACWI) Energy, Materials and Industrials sectors for oil price sensitivity. BofA defines Oil Price Sensitivity for each stock as the regression coefficient from regressing 60 months of monthly price returns against the 3-month change in the Oil Price – Brent Crude. Here are 3 of the most sensitive oil and gas stocks to oil price changes.

By Alex Kimani
click here to read the original article at Oilprice.com
*this article was not written by Roseland Oil & Gas