Energy stocks rise on Iran tensions and oil price gains

Energy stocks climbed late Friday afternoon as geopolitical tensions in the Middle East pushed crude oil prices higher. The NYSE Energy Sector Index rose 2.6%, while the State Street Energy Select Sector SPDR ETF (XLE) gained 2.7%. The Philadelphia Oil Service Sector Index led the sector higher, climbing 5.4%, though the Dow Jones US Utilities Index slipped 0.8%.

The rally in oil followed reports that Iran declared its readiness for "asymmetric warfare." State-affiliated Tasnim News Agency reported Thursday, citing the nation's army chief, that the Iranian military is fully prepared for such conflict. These comments compounded market supply concerns after reports indicated the US and Israel were preparing for fresh strikes following midterm elections in the US.

Front-month West Texas Intermediate crude oil gained 4.1% to $103.51 a barrel. The global benchmark Brent crude contract rose 3.4% to $117.06 a barrel. In contrast, Henry Hub natural gas futures fell 5.8% to $2.64 per 1 million BTU.

In corporate news, Hess Midstream (HESM) shares rose 2.4%. Raymond James upgraded the stock to outperform from market perform, setting a price target of $32 per share.