The deal to avert the fiscal cliff has not only shot the Dow Jones Industrial Index (DJINDICES:^DJI) into orbit today, but it has also boosted oil. While the Dow has gained 1.8% in the first day of trading since Congress approved the deal, the black gold has gained 1.1% to reach nearly $93 per barrel today.
On the Dow, the reaction from major energy stocks is somewhat muted. ExxonMobil (NYSE:XOM) and Chevron (NYSE:CVX) are up 1.9% and 1.4%, respectively, barely keeping pace with oil's gain. This owes to the fact that they didn't fall as hard when prices fell, because their diverse businesses are less affected by prices than are exploration and production companies.
Speaking of explorers, Kodiak Oil & Gas (NYSE: KOG) is up 4.9% today, while Bakken neighbor Continental Resources (NYSE:CLR) has risen 2.9%. These two companies need prices to remain high to economically remove oil from shale, so it's especially important for them to see oil move higher.
Elsewhere in energy, the solar industry is soaring across the board. One thing driving the industry higher is SunPower's (NASDAQ:SPWR) announcement it will sell a $2.5 billion project to Warren Buffett's Berkshire Hathaway (NYSE:BRK.B) subsidiary MidAmerican Energy. This is Buffett's second big solar deal, and it gives investors confidence to jump back into solar stocks.
The other thing investors have been focusing on is another extension of the wind-investment tax credit in the fiscal-cliff deal. With solar's similar tax credit expiring in three years, there are worries that demand may suffer when that time comes. Maybe a similar deal will extend the major federal subsidy for solar as well.
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