New Concept Energy, Inc. (NYSEAMERICAN: GBR) is flying in the market today, gaining in multiples with no news out from the company. So, what’s going on? The company’s flagship product, oil, continues to grow in value. As a result, excited investors pushed the stock up dramatically, leading to a frenzy of buyers who continue to make the stock climb. Today, we’ll talk about:
- What’s going on with oil;
- what we’re seeing out of GBR as a result; and
- what we’ll be watching for ahead.
GBR Gains Big On Gains In Oil
As mentioned above, New Concept Energy is having an incredibly strong start to the trading session this morning as its flagship product, oil, grows in value. The gains are ultimately the result of two big facgtors:
Crude Oil Supplies – According to the most recent reports, crude oil supplies declined by 9.9 million barrels in the week ending on June 22. This was the largest decline so far this year and proved to be far ahead of what analysts expected. Of course, this gave oil a boost, accounting for some of the gains in GBR. In a recent statement, Matt Smith, director of commodity research at ClipperData, had the following to offer with regard to the declines in oil supplies:
Record crude exports and record refinery runs have combined to yield the biggest draw to crude stocks so far this year. Even crude production holding at a record level has been unable to offset strong domestic and international demand.
Iran – The other side of the equation has to do with the geopolitical condition. Currently, President Trump and his administration are working to put pressure on Iran. Through sanctions, the Administration hopes to push Iran in the right direction with regard to the country’s nuclear ambitions. However, that pressure includes sanctions, and since Iran is one of the largest oil producers in the world, these sanctions can push oil up, ultimately benefiting GBR and others in the oil and energy sector. In fact, Hootan Yazhari, head of frontier markets equity research at Bank of America Merrill Lynch, recently had the following to offer:
We are in a very attractive oil price environment and our house view is that oil will hit $90 by the end of the second quarter of next year. We are moving into an environment where supply disruptions are visible all over the world… and of course President Trump has been pretty active in trying to isolate Iran and getting U.S. allies not to purchase oil from Iran.
What We’re Seeing From The Stock
As investors, one of the first lessons that we learn is that the news moves the market. While New Concept Energy hasn’t released any news of their own, investors are excited as they watch the oil industry. After all, gains in the price of oil will likely equate to gains in revenue for the company. So, it’s no surprise that we’re seeing the stock climb in the market today. Of course, our partners at Trade Ideas were the first to alert us to the movement. At the moment (10:16), GBR is trading at $3.09 per share after a gain of $1.63 per share or 111.64% thus far today.
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What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will continue to keep a close eye on GBR. In particular, we’re interested in following the company to see how they turn the growth in oil into improving revenue. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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