Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of companies in the oil and gas industry shot higher today as the stock market and oil prices all rose sharply. Pioneer Drilling
So what: Oil has spiked 3.6% today, rebounding after a week of worry over Europe's debt problems kept the fuel source near recent lows. The price of oil has a strong impact on service providers because producers will stop drilling if prices get too low, and there was fear that the downturn in prices would be long-lasting given Europe's extensive problems. For today, that fear has subsided, and the energy industry is hot again.
Now what: Everyone from driller Precision Drilling
The news out of Europe and the U.S. was positive today, but I would be cautious placing a big bet on a recovery and, therefore, oil at this point. Europe has a long way to go before its debt problems are over, and with growth still anemic in the U.S., I don't anticipate a sharp rise in oil prices in the near future. It might be prudent to sell the highs and buy the lows right now, because oil is probably in a bit of a holding pattern until we get an indication one way or the other of where the economy is headed.
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