Why Core Laboratories, Transocean, and Helix Energy Solutions Rallied in Early Trading Today
Shares of energy services provider Core Laboratories (NYSE: CLB) rose nearly 9% in the first two hours of the trading day on Nov. 23. Even more impressive was the nearly 14% gain at Helix Energy Solutions (NYSE: HLX). Besting that advance was Transocean (NYSE: RIG), which saw a price increase of nearly 20% in early trading. The big price moves here all relate back to the same general theme: improving oil prices.
There are multiple relationships involved here. For starters, Core Labs, Helix, and Transocean all provide vital services to energy companies as they seek out and drill for oil and natural gas. However, demand for their services is highly reliant on oil and gas prices. Higher energy prices tend to lead to more drilling and lower prices usually result in exploration and production (E&P) companies pulling back on capital spending. In other words, rising and falling energy prices, from a big-picture point of view, correlate to rising and falling demand for energy services companies.
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Source Fool.com