What happened

Crude prices in the U.S. continued their ascent today, rising nearly 3% to about $72.50 a barrel -- the highest level since late 2014 -- after the U.S. government reported a massive drawdown of oil storage levels. This news sent most oil stocks soaring, including Sanchez Energy (NYSE:SN) -- up 12% at one point -- and Concho Resources (NYSE:CXO), which rallied nearly 6% by the mid-afternoon and was one of the biggest gainers in the S&P 500. However, that rally in the oil market didn't drive up the entire sector as CNX Midstream (NYSE:CNXM) and Mammoth Energy Services (NASDAQ:TUSK) both tumbled double-digits on the day.

So what

A stunning 9.9 million barrels of oil left storage depots across the U.S. last week, which was roughly triple the 2.6 million-barrel-decline that analysts anticipated. Driving the huge inventory drawdown were production issues in Canada as well as record volumes of crude processed by refineries and exported to global markets. That unexpectedly steep decline in storage levels sent oil prices surging since it suggested that demand is currently well ahead of supply.

Oil pumps working the the background near a drilling rig.

Image source: Getty Images.

That improvement in the price of crude is a boon for U.S. oil producers, which will make more money on their production. One big beneficiary will be Sanchez Energy since higher oil prices will give it more cash flow to pay down debt, which currently stands well above its ideal level. Meanwhile, the improvement in oil prices will also help Concho Resources, which has been under pressure in recent weeks due to lower region oil prices caused by pipeline constraints in the Permian Basin. That's because it will also drive up those regional prices, enabling Concho to earn more money on its production.

However, not all energy stocks are benefiting from the uptick in crude today. CNX Midstream and Mammoth Energy both sold-off amid the broader energy market rally after large shareholders sold big blocks of stock in a secondary offering at below-market prices. In Mammoth's case, investors unloaded 4 million shares at $38.20 apiece, pulling in $152.8 million for themselves. Meanwhile, Noble Energy sold 6.5 million units of CNX Midstream that it held for $18.30 apiece. Those selling prices were well below yesterday's closing prices, which is why shares slumped today. However, both stocks were up sharply in 2018, so the sales seem to be nothing more than some profit taking.

Now what

After fretting over too much supply in recent years, investors are now beginning to wake up to the reality that there's not enough crude to meet the market's need. That's why OPEC's decision to start turning some pumps back on still hasn't cooled off crude prices. Because of that, there could be more upside for oil stocks, with this trio looking among the most compelling to consider buying this month.