NEW YORK, NY (Commodity Online): Shares of oil and gas exploration and production companies have been on the upswing of late. Shares of the SPDR S&P Oil & Gas Exploration & Production ETF (XOP) are up roughly 5 percent over the last week as oil prices remain strong and natural gas prices begin to recover from a decade low in January, according to an assessment by Five Star Equities.
Royale Energy Inc and TransAtlantic Petroleum Corporation are poised to benefit from the oil rally rally.
Last week the International Energy Agency (IEA) cut its forecast for growth in oil demand this year of 0.8 million barrels per day (mbd) from 1.1 mbd after the International Monetary Fund slashed its estimate for global economic growth in 2012 to 3.3 percent from 4.0 percent. The IEA was optimistic about the impact of tighter international sanctions on Iran, including an EU import ban which takes effect in July. "Despite tougher new sanctions by the international community, the market is largely still taking the situation in its stride," said the IEA.
Iran's governor to OPEC argues that oil prices will continue to rise and the global market won't be able to compensate for a loss of Iranian crude supply. "The increase of crude prices in the global market is likely to continue," Mohammad Ali Khatibi was cited as saying by the country's state-run Mehr news agency.
In the natural gas market, weather forecasts continue to point to milder-than-normal temperatures in the weeks ahead, suggesting that gas-fired heating demand is likely to remain weak, The Wall Street Journal (WSJ) reports. Despite the drop in demand, production cuts from industry heavyweights in recent weeks have stemmed the slide in natural gas prices, leading some analysts to argue that prices have found a floor. "If you get more production shut ins, that would probably close a door on it," and natural gas could head higher, Gene McGillian, an analyst with Tradition Energy, told CNBC.
