Here's Why the Stock of Baker Hughes, a GE Company, Rallied in September
Shares of Baker Hughes (NYSE: BHGE) rose sharply in September, ending the month up 6.5%. That's after the recently minted subsidiary of General Electric (NYSE: GE) benefited from rising oil prices, which implies that better days lie ahead for the oil-field service company. That renewed optimism helped offset a lukewarm reception from the analyst community.
The U.S. oil price benchmark, WTI, catapulted 7.7% last month to close at $51.67 per barrel. That pushed crude into bull market territory, capping a more than 20% comeback from its bottom in June, fueled by accelerating oil demand and tepid supply growth after shale drillers tapped on the brakes. The rally suggests that drillers won't need to cut much deeper into their drilling budgets, which should enable Baker Hughes and rivals Schlumberger (NYSE: SLB) and Halliburton (NYSE: HAL) to continue pushing through price increases and boost profitability.
Image source: Getty Images.
Source: Fool.com
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