Energy companies have seen a rally in share prices as traders speculate that another round of inflation is ahead. Oil futures reached a closing price of $88.84 per barrel, marking the highest level since November last year. Efforts by Saudi Arabia and Russia to maintain global supply shortages have contributed to the rise in oil prices. In addition, traders expect that the strength of oil prices will spill over to natural gas, resulting in a more than 6% increase in natural gas futures. This is especially important because of the upcoming warming season in the Northeast.
Amidst this rise, BP, a major oil company, saw its stock decline. This is due to the unexpected resignation of CEO Bernard Looney, who has only been in his position for three years. Chief Financial Officer Murray Auchincloss has temporarily taken over the reins. The decision to replace Looney was made after it was revealed that he had not been completely honest about his past personal relationships with colleagues.
In conclusion, the expectation of inflation led to an increase in share prices of energy companies. Oil prices hit their highest levels in nearly a year, driven by efforts to keep up with global supply shortages. Traders also predict that the stability of oil prices will spill over into natural gas. Meanwhile, BP is facing a drop in share prices following the unexpected resignation of its CEO, Bernard Looney.
– Inflation: a continuous increase in the general price level of goods and services in an economy over a period of time.
– Oil futures: contracts that oblige the buyer to buy a certain amount of oil at a predetermined price and time in the future.
– Natural gas futures: contracts that oblige the buyer to buy a certain amount of natural gas at a predetermined price and time in the future.