Canada Markets closed

StockBeat: Apache Jumps as Oil Soars

Investing.com - Apache (NYSE:APA) shares were soaring Monday in the aftermath of a drone attack on Saudi Arabia oil facilities on Saturday.

Apache (NYSE:APA), one of the largest independent U.S. oil-and-gas producers, was up more than 15% Monday afternoon and is up 30% so far in September.

The gain has put the stock back in the black for 2019. As of Friday's close, the shares were off 7.3% for the year. Now, Houston-based Apache (NYSE:APA) is up about 7%.

Energy shares had a great first quarter as Saudi Arabia pushed a campaign to get major oil-producing countries to cut output to boost prices. But the prices – and the stocks -- slumped in the second quarter and into the third quarter because of the U.S.-China trade battle.

The situation reversed itself after Saturday's drone attacks on the state-run Saudi Arabian Oil Co.’s (Aramco) Abqaiq plant – a key crude processing facility – and the Khurais complex, which houses the kingdom’s second-largest oilfield.

West Texas Intermediate crude was up 14.3% at $62.68 a barrel.

Apache's outsized gain was due in part because its exposure in the Middle East is limited to production in Egypt, and the company had already been telling investors it will be boosting its Permian Basin production in Texas by a third in the fourth quarter to around 100,000 barrels of oil (and equivalents) per day.

Also, Goldman Sachs (NYSE:GS) analysts rated Apache (NYSE:APA) among companies with "the greatest 4Q19 potential operating cash flow percentage uplift." Others included Hess (NYSE:HES), Occidental Petroleum (NYSE:OXY) and Cimarex Energy (NYSE:XEC).

Energy shares were among the few stock-market sectors showing gains. Chevron (NYSE:CVX) and Exxon Mobil (NYSE:XOM), up 2.6% and 2.2% respectively, were the top performers among the 30 Dow stocks. The Dow Industrials were off 0.47%.

Saudi Arabia produces about 10% of the world’s oil. The disruption could slash Saudi Arabia’s daily oil exports of 7.4 million barrels by as much as three-quarters. The New York Times said Monday the attacks could take roughly 5% of global supplies off the market, unless the Abqaiq facility in particular is quickly repaired.

Related Articles

Opioid plaintiffs fight bid to disqualify U.S. judge before trial

Changes eyed to U.S. financial oversight law for Puerto Rico

U.S. charges Prudential subsidiaries for allegedly misleading 94 mutual funds