Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Energy Stocks Jump Despite Oil's Plunge

Oil fell another $1.30 today to less than $98 after the Department of Labor reported a slightly disappointing 148,000 jobs created in September. This is the second consecutive day oil has tumbled, falling because of a larger-than-expected rise in inventory yesterday.

While oil itself is down, neither the Dow Jones Industrial Average (DJINDICES: ^DJI  )  nor its energy components are feeling the same effects. The Dow is up 0.6% late in trading, and Chevron (NYSE: CVX  ) and ExxonMobil (NYSE: XOM  ) are up 0.7% and 1%, respectively.

While oil has fallen from around $103 per barrel last Wednesday to less than $98 per barrel today, Chevron and ExxonMobil are both up just less than 1%. The reason oil isn't pulling them down is that falling oil prices aren't all bad for business. While exploration profits may suffer from lower oil prices, profits will go up on the refining side of the business. Refineries make a profit on the difference between the price of gasoline and the price of oil, and that has actually widened in the past week.

While oil is down about 5% over the past week, gasoline has only dropped about $0.02 to $3.35 per gallon, according to GasBuddy. That's a drop of about 0.6%, which differs from the drop in oil prices and leaves more profit for Chevron and ExxonMobil's refineries. It's like taking profit out of one pocket and putting it in another.

Another energy member in the S&P 500
The other energy stock making noise today is Transocean (NYSE: RIG  ) , the offshore drilling-rig owner, which will be added to the S&P 500 on Oct. 28. The stock is up 5.5% on the news, primarily because S&P 500 index funds will soon be forced to buy the stock.  

A pop like this doesn't often last long, because buyers today are buying for more technical reasons than fundamental ones. With that said, Transocean is well-positioned in an expanding ultra-deepwater drilling market, so it will profit from some of the long-term price pressures facing companies like Chevron and ExxonMobil in the oil industry.

Profit from the oil market
The days of $100 oil aren't gone for good, and for investors that are positioned to profit from the return of $100 oil, it can't come soon enough. To help investors get rich off of rising oil prices, our top analysts prepared a free report that reveals three stocks that are bound to soar as oil prices climb higher. To discover the identities of these stocks instantly, access your free report by clicking here now.

Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2693988, ~/Articles/ArticleHandler.aspx, 9/26/2016 6:57:43 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
DOW 18,094.83 -166.62 -0.91%
S&P 500 2,146.10 -18.59 -0.86%
NASD 5,257.49 -48.26 -0.91%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/26/2016 4:35 PM
^DJI $18094.83 Down -166.62 -0.91%
CVX $98.78 Down -0.44 -0.44%
Chevron CAPS Rating: ****
RIG $9.52 Up +0.42 +4.62%
Transocean CAPS Rating: ****
XOM $83.06 Down -0.39 -0.47%
ExxonMobil CAPS Rating: ****