News that the upcoming producers' meeting between OPEC and Russia might lead to an agreement to freeze production fueled a big oil price rally earlier this week, with crude breaking through $40 a barrel. That said, the rally did start to fade at the end of the week after more reports surfaced that a deal was no sure thing.
Still, that didn't seem to dampen energy stocks this week because they also got a big boost from their banks, which are a bit more lenient than expected. This proved to be a powerful combination sending dozens of energy stocks up double digits in hopes that the oil market might be turning a corner.
According to S&P Global Market Intelligence data, among the best-performing energy stocks during this week were Chesapeake Energy (NYSE:CHK), Foresight Energy (NYSE:FELP), Parker Drilling (NYSE:PKD), Southwestern Energy (NYSE:SWN), and SM Energy (NYSE:SM).
With producers meeting this weekend to potentially work on a solution to stabilize oil prices, optimism is running high for Chesapeake Energy, Parker Drilling, Southwestern Energy, and SM Energy. That's because once oil starts to stabilize these companies will have a much better handle on future industry activity and their cash flow for the balance of the year. In addition to the boost from higher oil prices, Chesapeake Energy and SM Energy also got a boost from their banks, which amended their credit facilities to both ease terms and firm up their liquidity.
Easing credit concerns also fueled Foresight Energy's rally this week after the coal producer extended an agreement with its lenders. Also, there were reports that its founder was preparing to bail out the company to help further ease its credit issues and keep it out of bankruptcy.
To learn more about why these stocks moved so sharply, check out the following slideshow.