By Christiana Sciaudone
Investing.com -- Energy stocks traded higher Tuesday after a jump in energy prices. Strong earnings, news that renewed U.S. stimulus is in the works and the approval of a European recovery fund are also supporting the sector.
The S&P 500 Energy rose 4.5%, led by Occidental (NYSE:OXY), up 11%, and Devon Energy (NYSE:DVN) and Halliburton (NYSE:HAL), both up 10%.
WTI futures are up 3.3%, to more than $42, their highest in over four months.
The international benchmark Brent was up 3.1% at $44.62 a barrel.
The macro backdrop was helped by the agreement – after four days of haggling – among EU leaders to back a 750 billion-euro ($860 billion) package that should help the EU economy recover from next year onward. More immediately, it removes any lingering concerns that the euro zone could come under renewed pressure to break up.
Market participants are hoping for a similarly happy ending to what is set to be a tough few days of negotiating in Washington, D.C., where lawmakers and the administration need to thrash out another bill to support the economy from August onward. Many of the existing support programs expire at the end of the month.
Later in the day, the American Petroleum Institute will release its weekly estimate of U.S. crude oil stocks. Last week’s official decline of 7.5 million barrels was the biggest weekly drop this year, and another similar number would be taken as a clear reassurance as to the strength of U.S. fuel demand.
Government data on oil stockpiles comes out Wednesday, and the consensus forecast is for a decline of 1.95 million barrels.