Why Centennial Resource Development Jumped 6% in Early Trading Today
Shares of U.S. oil and natural gas exploration and production (E&P) company Centennial Resource Development (NASDAQ: CDEV) rose a quick 6% in the first half hour of trading on Oct. 5. That gain didn't hold, however, with the stock sitting at a roughly 3.5% gain by around 10:30 a.m. EDT.
Centennial's top and bottom lines depend heavily on the price of the commodities it produces. Oil and natural gas, however, have a tendency to be volatile and, at the moment, are hovering at relatively low levels. In fact, it's hard for many E&P names to turn a profit right now. The quick advance in the stock price was likely driven by a sizable jump in the price of oil and natural gas, which makes complete sense. But that isn't the whole picture.
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