QEP - Why QEP Resources Stock Rose as Much as 11.5% Today
Shares of $280 million market cap U.S. onshore driller QEP Resources (NYSE: QEP) advanced as much as 11.5% on Sept. 16. The reason for the advance was a sizable increase in the price of oil. That's great, but the big picture is still pretty ugly and a lot more important than one day's price move.
Oil prices have been heavily impacted by news lately, with updates on the amount of oil in storage, storms in the Gulf of Mexico, and OPEC meetings all pushing black gold higher and, at other times, lower. Today's news was generally good, so oil went up. But tomorrow could just as easily bring bad news, and oil will fall anew. The bigger problem is that the energy market is in a troubling place today, with oil sitting at levels that make it hard for exploration and production companies to turn a profit. That's largely because of the demand declines that resulted from the worldwide effort to slow the spread of COVID-19 by, effectively, shutting down vast swaths of the global economy. The outlook for oil drillers like QEP Resources depend greatly on oil rising and, thus, investors tend to boost its stock when oil goes up.
Image source: Getty Images.