U.S. oil prices have climbed to their highest level since late October, as the rally in the key commodity becomes something equity investors cannot afford to look past. West Texas Intermediate crude futures rose modestly Wednesday and at one point breached $86 a barrel, bringing the U.S. oil benchmark’s year-to-date gain to 19%. Brent crude also climbed Wednesday and nearly eclipsed $90 a barrel. The global oil standard is up about 16% in 2024. Meanwhile, shares of Coterra Energy , our lone oil-and-gas holding, are up about 9% over the past month, among the top-performing portfolio stocks in that timeframe. Energy has been by far the best S & P 500 sector during the same stretch, jumping more than 12% compared with a roughly 1.7% gain for the index. The latest news driving Wednesday’s gains for oil: The Organization of Petroleum Exporting Countries and a group of partner producers led by Russia, together known as OPEC+, does not plan to change its output policy . OPEC+ last month agreed to extend its 2.2 million barrels per day output reduction until the end of the second quarter in an effort to support prices. Outside of the cartel’s policy, the multiweek rally for crude has been driven by positive demand updates and concerns about supply amid mounting tensions in the Middle East. The much-better-than-expected ISM Manufacturing PMI reading released Monday — 50.3 versus 48.1 expected — was a significant development for the oil market for multiple reasons. Not only was it stronger than anticipated, but it was on the right side of 50, indicating that U.S. manufacturing activity expanded for the first time since September 2022. Moreover, in a commentary section of the ISM report, many respondents indicated they expected to see activity pick up into the back half of the year. In other words, the latest ISM Manufacturing report serves to support the view that the U.S. economy is doing much better than many believed it would just a few months ago. A separate…
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