What Happened?
A number of stocks jumped in the afternoon session after oil prices surged amid rising geopolitical tensions in the Middle East.
The price of Brent crude, the international oil benchmark, rose sharply. This increase came after threats were made against Iranian oil wells and export hubs if a deal concerning the Strait of Hormuz was not reached. The conflict in the region pushed oil prices to historic levels, with Brent crude experiencing its biggest monthly gain on record. Higher crude oil prices translate into increased potential revenue and profitability for these companies, boosting investor confidence in the sector despite the broader geopolitical risks.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.
Among others, the following stocks were impacted:
- U.S. Shale E&P company HighPeak Energy (NASDAQ: HPK) jumped 7.2%. Is now the time to buy HighPeak Energy? Access our full analysis report here, it’s free.
- Mixed or Offshore Upstream E&P company Clean Energy Fuels (NASDAQ: CLNE) jumped 2.5%. Is now the time to buy Clean Energy Fuels? Access our full analysis report here, it’s free.
- U.S. Shale E&P company Riley Exploration Permian (NYSE: REPX) jumped 3%. Is now the time to buy Riley Exploration Permian? Access our full analysis report here, it’s free.
- Infrastructure company Calumet (NASDAQ: CLMT) jumped 9.3%. Is now the time to buy Calumet? Access our full analysis report here, it’s free.
- Mixed or Offshore Upstream E&P company Granite Ridge Resources (NYSE: GRNT) jumped 2.7%. Is now the time to buy Granite Ridge Resources? Access our full analysis report here, it’s free.
Zooming In On Calumet (CLMT)
Calumet’s shares are very volatile and have had 26 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
Calumet is up 80% since the beginning of the year, and at $35.18 per share, has set a new 52-week high. Investors who bought $1,000 worth of Calumet’s shares 5 years ago would now be looking at an investment worth $5,973.
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