Oil Stocks News: What’s Happening With IMPP, INDO, ENSV, CEI Stocks Today?
Oil inventories are trending higher today as markets around the world digest news of a Covid-19 surge in China and an escalating war in Ukraine.
Brent crude oil, the international benchmark, is back above $100 a barrel after falling below it yesterday. West Texas Intermediate crude, the US standard, is up nearly 7% today at $100.50 a barrel. The increase comes as Shanghai suffers its worst Covid-19 outbreak since the pandemic began two years ago and the war in Ukraine appears to be intensifying.
Rising crude prices are sending oil company stocks skyrocketing, with speculative names such as Imperial Oil (NASDAQ:IMPP), Indonesia Energy (NYSEMKT:INDO) and Camber energy (NYSEMKT:IEC) each up more than 5% in morning trading.
What happened with oil stocks
After falling last week, global crude oil prices are reversing this morning and rising. The price of Brent crude is up 6% today at $104.70 a barrel after falling below $100 a day earlier. In early March, Brent crude was trading above $130 a barrel, with many analysts predicting it was on its way to $150 or higher.
The reversal in oil prices was prompted by fears of a massive Covid-19 outbreak in China, where the government has locked down Shanghai, which serves as the country’s financial hub. Additionally, Russia is reportedly preparing for a massive assault in eastern Ukraine, where it has positioned tens of thousands of troops.
The rise in oil prices comes despite the United States and other countries coordinating a record release of oil from its Strategic Petroleum Reserves to help boost supply and lower prices at the pump.
why is it important
Although bad for consumers, rising oil prices are good news for oil producing companies. Shares of IMPP, INDO, CEI and others rise whenever the companies can get more money for the oil they extract from the ground.
The energy sector was the best performer and the only bright spot for investors this year. The S&P 500 Energy Index is up nearly 40% year-to-date, compared to a 7% year-to-date decline for the benchmark S&P500. Many notable investors, including Warren Buffett, have taken large stakes in oil companies in recent months as crude prices have risen.
Oil stocks are expected to rally today as the price of crude rises. This is a welcome relief for shareholders of stocks such as IMPP, INDO, CEI and others. After a week of declines, the rise in energy stocks is expected to continue as crude oil prices climb back above the critical $100 a barrel level.
As of the date of publication, Joel Baglole had no position (directly or indirectly) in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to InvestorPlace.com Publication guidelines.