Shares of digitally focused energy services provider Core Laboratories (NYSE: CLB) rose 7% out of the gate on Nov. 16. The stock was holding on to most of that gain at 11 a.m. EST, too, as it was still up about 6% or so. Why? The easy answer here is that oil prices were on the rise today, but that's really just a piece of what's going on right now.
Core Labs customers are exploration and production companies. When the coronavirus started to spread across the globe, countries effectively shut their economies in an attempt to slow the spread of the virus. Oil was already a bit oversupplied prior to that, but the closures led to a massive decline in demand and oil prices fell off a cliff. At one point a key U.S. oil benchmark actually fell below zero . It was a temporary drop, but it speaks to the massive supply/demand dislocation that exists today. Needless to say, facing worryingly low oil prices, energy companies around the world have been pulling back on spending. And, thus, Core Labs has seen demand for its services fall, too.
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Why Core Laboratories Stock Jumped 7% at the Open Today