Market Rides Energy Shares Higher

This morning the U.S. Energy Information Administration surprised the markets with the report of a bigger than expected decline in oil stockpiles. Crude inventories fell by 10 million barrels for the week ended August 16. The prior week showed a drawdown of 2.7 million barrels.

U.S. benchmark West Texas Intermediate gained 1.82% to $55.93 a barrel at the end of the day. International benchmark Brent crude gained 1.63%  to $60.48 a barrel.

At the close today, the Standard & Poor’s 500 stock index had gained 0.65% and the Dow Jones Industrial Average 1.00%. The NASDAQ Composite was ahead 0.38% and the small cap Russell 2000 was up 1.15%.

Reflecting the leadership of the energy sector, the Energy Select Sector SPDR ETF (XLE) closed up 1.45%. The Financial Select Sector SPDR ETF (XLF) gained a lesser 0.88%. The Technology Select Sector SPDR ETF (XLK) was higher by a bare 0.09%.

The strong move in energy stocks was partly a result of the recent downtrend in the sector. The Energy ETF had tumbled from $57.90 on August 19 to $55.85 on August 27 before recovering today to $56.66.