The price of a barrel of US WTI oil is up 1.5 percent today to $122.72 after the price has fallen in recent days. And that’s good for oil stocks on Wall Street. Marathon Petroleum
climbs 2.7 percent, Marathon Oil
bounces 2.3 percent, Occidental Petroleum
wins 2.5 percent and Schlumberger
rises 1.5 percent.
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Oil prices remain high due to the war between Russia and Ukraine and the oil embargo that the European Union has imposed on Russian oil. Russia is one of the world’s top oil producers, and its war with Ukraine – and international sanctions – has seen its oil production and exports plummet.
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The oil price has risen by more than 60 percent since the beginning of this year and the oil companies are benefiting from this. They can sell the oil at a much higher market price while costs rise much less rapidly because production remains stable at many companies. ExxonMobil, for example, posted $5.5 billion in profit in the first quarter, despite a $3.4 billion write-down on its Russian operations.
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Master investors like Warren Buffett also smell the oil money. Buffett continues to buy Occidental Petroleum shares and already owns more than 15 percent of the US producer of shale oil and gas.
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