CNBC's Brian Sullivan reports how America's fracking boom is beginning to collapse along with the price of oil.
Stocks rose sharply on Thursday as oil prices recovered even more ground after a historic plunge while Wall Street digested the latest U.S. unemployment and earnings data.
The Dow Jones Industrial Average climbed 334 points, or 1.4%. The S&P 500 and Nasdaq Composite both advanced 1.3%. At its session high, the Dow was up more than 400 points, or 1.7%.
Chevron and Exxon Mobil were among the best-performing stocks in the Dow, climbing more than 3% each. The S&P 500 energy sector gained 4.1% as Apache, Noble and Devon Energy all rallied more than 10%.
West Texas Intermediate futures for June delivery jumped 30% to $18 per barrel as traders increased bets on U.S. production cuts. WTI also rallied on Wednesday.
Earlier in the week, concerns over a lack of energy demand sent WTI’s May contract — which expired Tuesday — into a negative price. Crude prices are also down sharply year to date even after their strong gains over the past two days.
“The resulting price action is highly damaging for many oil producers, and certainly implies a sharp fallback in US shale fracking, contributing to much weaker US exports and capex later this year,” wrote Charles Dumas, chief economist at TS Lombard.
Oil’s rebound helped equities claw back some of their steep losses from earlier in the week. Between Monday and Tuesday, the S&P 500 and Dow dropped more than 4% before rallying around 2% on Wednesday.
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