What’s Fueling Fairmount Santrol Holdings Inc’s Surge Today?

Shares of Fairmount Santrol (NYSE: FMSA) jumped nearly 12% by 2:45 p.m. EDT on Tuesday. It wasn't the only frack-sand producer to rally today, as Hi-Crush Partners (NYSE: HCLP) and U.S. Silica (NYSE: SLCA) were up about 4% by the mid-afternoon. That said, these moves were a bit of a head-scratcher since there weren't any news-driven catalysts to ignite a buying spree. However, there are three plausible reasons why these stocks could be rallying.

First of all, crude continued its upward momentum, with the U.S. oil benchmark price, WTI, climbing another 0.4% today and closing at $54.38 per barrel. That pushed WTI up nearly 5% for the month to a level where more drillers are comfortable with at least maintaining their current drilling pace.

That would be good news for frack sand producers because it means that drillers would continue demanding sand to complete new shale wells, which could push up prices. That could fuel higher profits for Fairmont, Hi-Crush, and U.S. Silica.

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Source: Fool.com