What happened

Shares of transportation-focused natural gas seller Clean Energy Fuels Corp (NASDAQ:CLNE) finished trading up 9.8% on June 22, 2018, closing out a great week that saw the company's stock price gain 19.2%. Today's big jump was most likely a product of the big news out of OPEC, which pushed oil prices sharply higher. Brent, an important global benchmark for crude oil futures, rose almost 3.6% today, while West Texas Intermediate, the major U.S. market price benchmark, increased over 5.7%. This marked the highest market price for crude oil futures in almost a month, when word of OPEC's initial plan first came out and oil prices started falling. 

The irony about today's price surge is that the catalyst was OPEC's announcement to increase oil production. The reasoning is simple: The final agreement, which calls for a ramp up to an additional 1 million barrels of oil per day over the next month -- though it's expected to take some time for producers to ramp up that much -- was well-received because many were fearing OPEC would raise its target even higher, potentially leaving the market awash in a crude oversupply. 

Four men holding a broken arrow that's pointed up.

Image source: Getty Images.

In other words, the market got something it absolutely loves: a measure of predictability and certainty. OPEC's move actually looks like it could forestall even higher prices later this year since projections show current output won't meet demand later in the year. This is a result of multiple years of weak oilfield development during the oil and gas downturn that started in late 2014. 

So what

This is good news for Clean Energy Fuels because more certainty around relatively higher oil prices means that commercial vehicle fleet operators, seeing higher diesel and gasoline prices as a long-term concern, will continue to explore and to switch to natural gas-powered vehicles. These cost significantly less to refuel. 

Two recent announcements bear this out. On June 20, the company announced it "...facilitated the filing of grant applications for 168 heavy-duty trucks equipped with the latest near zero engine technology and powered by Clean Energy's Redeem renewable natural gas." For some context, 168 heavy-duty trucks could easily consume 3.4 million-gallon equivalents of natural gas per year. On June 22, the company announced the opening of a compressed natural gas station in Kansas that would provide over 1.2 million-gallon equivalents of natural gas to 170 transit buses and refuse vehicles serving the Johnson County area. 

Now what

On May 10, Clean Energy Fuels reported first-quarter earnings and announced that oil and gas giant Total SA was taking a 25% stake in the company. Since then, its share price has increased 77%. Going back to the low point on March 1, the company's stock price has surged 157%. Yet even after these big gains, Clean Energy still looks like a great investment. 

The diesel market in North America is more than 50 billion gallons per year, and last year it sold less than 400 million gallons of natural gas -- meaning there's substantial opportunity to grow from here. With the company's market capitalization of $529 million at the closing price today, its stock's recent run-up hasn't pushed its value into extreme premium territory. 

Furthermore, it's unlikely that alternatives like EVs and hydrogen will be road ready for heavy transit for many years to come, while natural gas supplied by Clean Energy is cheaper and cleaner -- and available -- today. 

Jason Hall owns shares of Clean Energy Fuels. The Motley Fool owns shares of and recommends Clean Energy Fuels. The Motley Fool has a disclosure policy.