What happened

Friday is turning out to be a good day to be in the energy business -- in any form -- as shares of hydrogen fuel cell company Bloom Energy (NYSE:BE), natural gas fuel supplier Clean Energy Fuels (NASDAQ:CLNE), and Enphase Energy (NASDAQ:ENPH) all rocketed to new heights.

As of 12:30 p.m. EST, shares of Bloom are up 12.4%, Clean Energy stock is up 11.8%, and even Enphase is hanging onto a 3% gain (after being up more than 6% earlier in the day).

Stock market arrow rising above a stack of oil barrels

Image source: Getty Images.

So what

In the energy world, things are getting shaken up by an announcement out of OPEC yesterday, that it has agreed with allied oil-producing nations to expand oil production only slightly in January 2021, by about 500,000 barrels per day (a fraction of the volume of production cut earlier in the economic crisis).

Any production increase can be interpreted as a broad negative for oil prices. But as recently as last month, OPEC was considering adding as much as 2 million barrels per day to global production. The fact that OPEC is now adding just one-quarter that amount is a boon to oil investors. In early afternoon trading, it's helping to lift the price of both WTI crude oil and Brent crude as well, by about 0.5% apiece.  

Now what

What does any of this oil news have to do with alternative energy stocks like Bloom, Clean Energy, or Enphase, you may ask?

Hydrogen, natural gas, and solar power are all broadly considered to be energy sources that are "alternative" to oil. The pricier oil becomes, the more cost-competitive such alternatives to oil become. (They're also of considered "greener" sources of energy than oil, of course, but price is always an object.)

Thus, it makes sense that when oil prices would go up, stocks offering alternatives to oil would also rise.

In the absence of any other news boosting shares of Bloom, Clean Energy, or Enphase, therefore, I think we can best trace today's share price gains directly back to the rising price of oil. And given that OPEC is also limiting itself to future production increases of no more than 500,000 per month (and perhaps less), the future looks bright for both oil stocks and for alternatives to oil.  

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.