Why Exxon Mobil, BP And Shell Shares Are Rising

Shares of several companies in the broader energy sector, including Exxon Mobil Corp XOM, BP plc BPRoyal Dutch Shell plc ADR Class A (NYSE: RDS-A) and Royal Dutch Shell plc ADR Class B (NYSE: RDS-B), are all trading higher amid tight oil supply and optimism surrounding global demand recovery despite a rise in COVID-19 cases. A drop in the US Dollar has also helped lift oil prices.

The U.S. 10 Year Treasury yield has risen sharply to start 2022, rising from around the 1.49% level on December 31 to around 1.76% during Tuesday's session. This has pressured stocks across sectors, though has especially weighed on growth sectors.

See Also: Why Splash Beverage Group Shares Are Soaring Today

When interest rates rise, the value of future cash flows is reduced for stocks, which in turn lowers the valuation of the stock. The energy sector, along with the broader market, has continued to face global macro concerns in 2022 as fears surrounding the COVID-19 omicron variant continue globally.

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