Why Energy Stocks Like ExxonMobil and Chevron Are Rallying on Monday
Oil stocks were rallying Monday, extending last week's sizable gains. As of 1:10 p.m. ET, ExxonMobil (NYSE: XOM) was up 5.6% while Chevron (NYSE: CVX) had gained 4%. Smaller drillers like Transocean (NYSE: RIG) and Diamondback Energy (NASDAQ: FANG) were higher to the tune of 9% and 6.2%, respectively, as the underlying driver of the groupwide rally means even more to them.
That reason? On Sunday, eight members of OPEC (the Organization of the Petroleum Exporting Countries) announced that they will be further cutting their output starting in May, crimping global supply. In response, the market bid up crude prices. As of midday Monday, West Texas Intermediate and Brent were both roughly 6% higher.
In retrospect, the OPEC members' move is not entirely surprising. The cartel and its close allies have a long history of maneuvering to keep oil prices -- and their profits -- high. With light sweet crude prices down as much as 40% from June's peak by late last month, the pump for such a decision was primed.
Source Fool.com
