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Oil Breaks the $100 Barrier After 7 Years on Ukraine Crisis

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The price of oil briefly rose above $100 a barrel on Thursday for the first time since 2014 amid Russia’s launch of military operations in Ukraine. Both Brent and the U.S. WTI crude futures headed into triple-digit territories after taping intraday highs of $105.79 and $100.54 a barrel, respectively.

The spike reflected concerns about oil supplies from Russia, which is one of the world's largest producers of the commodity. Yesterday, President Vladimir Putin declared the start of a “special military operation” in Ukraine, aimed at "demilitarization and denazification” of the country. The Ukrainian and Western governments have condemned the strike as a sham and a violation of international law. On its part, Kremlin has vowed to retaliate against any interference.

Traders are worried that the turmoil in Ukraine might lead to interruptions of Russian energy exports to Europe as punitive sanctions target the country’s banks and leading companies. With the United States, United Kingdom, the 27-nation European Union, and Australia, among others, threatening harsher measures, markets are primarily reacting on the potential that the situation could worsen.

But with the formally announced sanctions mostly avoiding any hurdles to Russian energy exports, oil prices eased somewhat in later trading yesterday, with the Brent settling at $99.08 and WTI at $92.81.

While the immediate impetus for the price rise appeared to come from the uncertainty imposed by Kremlin’s aggression, crude has been flirting with the $100 mark for months because of a demand spike owing to the reopening of economies and a rebound in activity.

As a matter of fact, the Energy Select Sector SPDR — an assortment of the largest U.S. companies thronging the space — has risen 20.9% year to date against an 11.2% loss for the broader S&P 500 benchmark.

Consequently, the top three gainers of the S&P 500 this year are all energy-related names: Halliburton HAL, Occidental Petroleum OXY and Marathon Oil MRO.

Halliburton: Halliburton, carrying a Zacks Rank of #3 (Hold), is the top-performing S&P 500 stock in 2022 with a gain of 37.6%. The company beat the Zacks Consensus Estimate for earnings in three of the trailing four quarters, the average being 9%.

Halliburton is valued at around $28.5 billion. The Zacks Consensus Estimate for HAL’s 2022 earnings has been revised 6.5% upward over the past 60 days.

Occidental Petroleum: This Zacks Rank #1 (Strong Buy) stock has jumped 34.2% year to date. Occidental Petroleum’s expected EPS growth rate for three to five years is currently 36.7%, which compares favorably with the industry's growth rate of 22.1%.

You can see the complete list of today’s Zacks #1 Rank stocks here.

OXY has a projected earnings growth rate of 81.3% for this year. The Zacks Consensus Estimate for Occidental Petroleum’s 2022 earnings has been revised 26.6% upward over the past 60 days.

Marathon Oil: This Zacks Rank #1 stock was the third-best performer in the S&P 500 Index, with shares appreciating 30.5% so far in 2022. Marathon Oil has a projected earnings growth rate of 83.4% for this year.

The Zacks Consensus Estimate for MRO’s 2022 earnings has been revised 26.9% upward over the past 60 days. Marathon Oil beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters, the average being 37.4%.


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