Shares of energy producers rose alongside oil futures, which staged their most extended rally of the year so far. Signs of a reduction in U.S. production, including the downtick in the Baker Hughes tally of active oil rigs last week, has inspired hope that global supplies could be peaking.
"The global oil supply glut hasn't eased as fast as we thought it would, but we expect to see a reduction in global oil inventories -- and a rebalancing of supply and demand -- in the second half," said Richard Turnill, global chief investment strategist at money management giant BlackRock.
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"Current OPEC compliance with production cuts is well above the historical average and it typically takes two to three quarters for inventories to reflect such cuts. Technological advances in U.S. shale are contributing to a supply surplus and keeping a cap on any oil price rise, but the growth rate of U.S. oil production has slowed recently. Also, we believe U.S. production could be further constrained by reduced labor supply and rising input costs."
General Electric closed its deal to merge its energy business with Baker Hughes Inc. on Monday, creating one of the largest companies in the oil-field services industry.
Activist investor Jana Partners has taken a roughly 5% stake in EQT and is seeking to scuttle the energy company's proposed $6.7 billion acquisition of Rice Energy.
(-By Rob Curran, firstname.lastname@example.org)
(END) Dow Jones Newswires
July 03, 2017 16:20 ET (20:20 GMT)