Energy markets hope for strong end to a weak week

Yahoo Finance’s Ines Ferre joins the Live show to discuss the rise in energy stocks.

Video transcript

RACHELLE AKUFFO: Crude is up today, but set to end the week lower. Ines Ferre is here to break down all the action. Hey, Ines.

INES FERRE: Hey, Rachelle. Yeah. As you just mentioned earlier, energy seeing a bump today, a little bit of a rebound with WTI, West Texas Intermediate up more than 3% right now. But if we take a look at the week, it's still heading for a third week of losses. As of yesterday, it had been down about 10% for the week.

The S&P 50_'s energy select ETF, XLE, it's a leader today. But if we pull up a five-day chart, it's clearly the biggest laggard for the week down about 5%. Now, this slide really has played out in tandem with a banking turmoil and concerns of a recession. We saw that as regional bank stocks came under pressure earlier this week, oil prices tanked.

Now, another factor impacting prices this week is data suggesting that China's reopening isn't totally linear. China saw factory activity contract unexpectedly in April, reducing demand expectations. And China reopening, though, is broadly seen as bullish for oil. But make no mistake, if we continue to see continued pressure on the banking sector, this could have an impact on oil. Here's what analyst Tom Kloza had to say to Yahoo Finance recently.

TOM KLOZA: If we get a debacle in the financial markets, it will definitely have collateral damage in oil.

INES FERRE: And on Wednesday, the Fed raised interest rates by 25 basis points. Now, that rise is expected to further put the brakes on the economy and reduce oil demand. And as we wrap up the week here, the latest jobs number beat expectations, still showing a hot labor market. And the expectation is that energy demand could stay strong. So overall, the selling that we saw earlier this week, it may have been a bit overdone. And that's why you're seeing the price action also on oil today go higher.

RACHELLE AKUFFO: Indeed. Ending a tough week on a high note at least so far. Thanks so much, Ines.