Basic Energy Services Shares Jumped: What You Need to Know
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of oil and natural gas service provider Basic Energy Services (NYS: BAS) rose 12% today on the back of higher oil prices.
So what: The company did announce an earnings release date of Oct. 20 this morning, but I doubt that had much to do with the move. Instead, Basic Energy Services and other oil-related stocks have piggy-backed on the incredible 4.4% jump in the price of oil.
Now what: As the price of oil and natural gas fall, as they have recently, the cost of drilling in the U.S. and other locations becomes less economical, affecting service providers. So it shouldn't be a surprise that Basic Energy's shares have almost directly followed the price of oil down in recent months. Today's rally is just part riding that wave, and if oil continues to rise, then I would expect shares to continue to move upward as well.
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At the time this article was published Fool contributor Travis Hoium does not have a position in any company mentioned. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDraw.Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.