Please ensure Javascript is enabled for purposes of website accessibility

Why Core Laboratories' Shares Popped 7.1% Today

By Travis Hoium - Mar 24, 2021 at 4:32PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Could oil be the cause?

What happened 

Shares of oil and gas services company Core Laboratories (CLB 2.83%) jumped as much as 7.1% in trading on Wednesday as oil prices soared. But the oil stock fell late in the day and closed up just 1.2%. 

So what

Crude oil prices rose sharply early in trading on Wednesday with West Texas Intermediate (WTI) prices up as much as 6.2% to $61.34 per barrel. At 4 p.m. EDT, WTI is still up 5.2% for the day. 

Oil being drilled at sunset.

Image source: Getty Images.

While the price of oil doesn't directly impact Core Labs' business, it's a big driver of the amount of exploration companies will do, which ultimately funnels business to Core Labs. So, when prices rise the future prospects for the oil business improve as well. At least, that's what short-term price action in the stock can indicate. 

Now what

The reality on the ground is that oil and gas exploration is going to be harder financially for companies in coming years. Oil and gas stocks are generally down over the last few years and investment is flooding into renewable energy instead of fossil fuels. Even if commodity prices rise short-term, that lack of funding is what's going to make it tough for explorers to grow long-term, which may be why shares pulled back to end the day. 

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Core Laboratories N.V. Stock Quote
Core Laboratories N.V.
CLB
$26.89 (2.83%) $0.74

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
332%
 
S&P 500 Returns
118%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/27/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.