Wall Street Opens Higher as Oil, Energy and Materials Advance

Wall Street opened higher on Monday as oil prices rose and metals advanced, a sign that investors’ appetite for risk is growing. Crude prices saw gains of over 5% on news that U.S. rig counts declined and the IEA (International Energy Agency) projected a drop in U.S. shale production. Industrial metals also advanced as shortage concerns grew. Despite oil’s gains, its prices still remain near low levels last seen in 2003.

Chevron (CVX) saw a 1.4% gain and gave the energy sector its biggest boost. The S&P’s financial sector was up 1.79% on Monday, with banks recovering slightly.

In morning trading, the Dow Jones was up 179.29 points (1.09%) to 16,571.28. The Nasdaq advanced 52.02 points (1.15%) to 4,556.45. The S&P 500 gained 22.75 points (1.19%) at 1,940.53.

All of the S&P 500’s major sectors saw gains, with energy and materials advancing 2% and leading the advancers.

Fitbit (FIT) gained 14% on Monday to $16.24. The company is expected to release its results later in the day.

Lumber Liquidators (LL), on the other hand, lost a staggering 20.8% to trade at $11.26 after a new CDC report reveals that the company’s laminate flooring may increase cancer risks.

Oil prices saw a 7% gain on Monday on news that U.S. shale production is expected to fall this year.

Brent crude futures gained 5.1%, or $1.68, to trade at $34.69. U.S. crude futures soared past the $30 per barrel threshold to trade at $31.69, up 6.9% ($2.05).

The IEA (International Energy Agency) stated that its medium-term outlook on U.S. shale production is expected to decline by 600,000 barrels per day in 2016, and an additional 200,000 barrels per day in 2017. Data released late last week also showed that the number of drilling rigs in the U.S. had dropped to its lowest level since 2009.

The IEA also projected that the oil market would begin to rebalance in late 2017.

In the United States, a record-high supply of crude, now 504.1 million barrels, weighed on markets, countering the proposed output freeze by OPEC and Russia. Both Russia and OPEC pumped out oil at a near-record pace of 10.88 million barrels per day last month.

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Daniel Simmons