Why Kosmos Energy Stock Rallied 15% in Early Trading Today
Shares of offshore oil driller Kosmos Energy (NYSE: KOS) rose as much as 15% on Nov. 18, moving steadily higher from the open until around 11:30 a.m. EST. At roughly 12:30 p.m. EST the stock was still holding on to most of its gain, up around 12%. The rising price of oil was the main factor, but there's a story behind that move that you need to understand.
Kosmos is an energy company, and its top and bottom lines are driven by the often volatile price of oil and natural gas. Energy prices have been low lately because of a massive supply/demand imbalance. A huge part of the imbalance is related to the economic shutdowns being used to slow the spread of the coronavirus, which have resulted in a rapid and large decline in demand. With far too much supply and reduced demand, oil and gas prices fell -- just as you'd expect in an oversupplied market. At this point, with economic activity starting to pick up again despite a resurgent virus, energy prices have risen off their worst levels of the year but still remain low and range bound.
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Source Fool.com
