Front-month West Texas Intermediate crude oil rose 2.4% to $99.46 a barrel, while the global benchmark Brent crude contract climbed 4.3% to $113.46 a barrel. The sharp increase in energy prices occurred alongside a broader sell-off in energy stocks late Thursday afternoon. The NYSE Energy Sector Index fell 1.1%, and the State Street Energy Select Sector SPDR ETF (XLE) dropped 1%. The Philadelphia Oil Service Sector Index saw a steeper decline of 3.4%, contrasting with the Dow Jones US Utilities Index, which added 1.7%.
Geopolitical tensions provided the backdrop for the market moves. Iran's Islamic Revolutionary Guard Corps stated that renewed attacks by the US could prompt Tehran to invade neighboring countries and strike bases used in US military operations. Al Jazeera, a Middle Eastern broadcaster, reported this as part of a new "offensive" strategy. In the natural gas market, Henry Hub futures shed 0.2% to $2.78 per 1 million BTU.
Corporate developments also influenced the sector. PG&E CEO Patti Poppe told investors on a call Thursday that the company is considering a regulatory-approved spin-off, sale, or other separation of its gas business. The goal, according to Poppe, is to lower borrowing costs for customers if wildfire-related risks are not addressed through policy reform. Separately, PG&E reported lower third-quarter results, with adjusted earnings meeting market expectations but revenue missing the consensus forecast. The company's shares fell 1.6%.