NEX - Why Core Laboratories Gran Tierra Energy and NexTier Oilfield Solutions Rallied Today
2023-04-03 16:22:25 ET
Shares of oilfield services companies Core Laboratories (NYSE: CLB) and NexTier Oilfield Services (NYSE: NEX) , surged Monday, as did small-cap explorer and producer Gran Tierra Energy (NYSEMKT: GTE) . The stocks ended the session up by 6.9%, 9.9%, and 9.2%, respectively.
It wasn't hard to understand why. On Sunday, members of the Organization of the Petroleum Exporting Countries (OPEC) surprised global markets with a significant cut to crude oil production. As a result, oil prices were on the rise Monday, lifting these three small-cap oil-related stocks along with them. But were these big moves justified, especially for the services companies?
Over the weekend, eight members of OPEC+ decided to cut production by a total of 1.16 million barrels per day in response to perceived macroeconomic weakness that had driven prices down as low as $65 per barrel in recent weeks. The move follows last October's 2 million barrel-per-day cut, which was also intended to boost oil prices. Leading the charge is Saudi Arabia, which will cut by 500,000 barrels per day beginning in May, with participation from the other major OPEC+ countries. In addition, Russia said it would extend the 500,000 barrel-per-day production cut it announced back in February through 2023.
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Why Core Laboratories, Gran Tierra Energy, and NexTier Oilfield Solutions Rallied Today