Seadrill (SDRL) Stock: Here’s Why It’s Soaring

Seadrill Ltd (NYSE: SDRL)

Seadrill is having an overwhelmingly strong day in the market today. As soon as the opening bell rang, the stock quickly found itself in the green. From there, we’ve seen some ups and some downs, but at the end of the day the stock is trading on impressive gains. Below, we’ll talk about what we’re seeing from the stock, why, and what we’ll be watching for with regard to SDRL ahead.

What We’re Seeing From SDRL

As mentioned above, Seadrill is off to an incredibly strong start to today’s trading session. When the opening bell rang, the stock was already well into the green. Throughout the day, we’ve seen mixed movement, but overall, things have been going well. This stock is likely to close in the green. Currently (11:03), SDRL is trading at $3.59 per share after a gain of $0.18 per share (5.28%) thus far today.

Why The Stock Is Climbing

The truth is that if you look across the oil and energy sector, you’ll see that SDRL isn’t the only one in the industry that’s seeing massive gains. In fact, this seems to be industry-wide movement. As soon as I saw that, I decided that it was time to start doing some digging to see what was going on. It came as no surprise that the answer had to do with the OPEC deal to cut production.

When the deal was announced on November 30th, the market cheered. However, concerns were brewing that OPEC members may not follow through. Nonetheless, it looks like that’s not going to be a problem. According to reports by Al-Ansa newspaper, Kuwait has cut production by 130,000 barrels per day. Also, Oman has cut 45,000 barrels per day of production.

As OPEC members continue to follow through on their promises to cut production, Seadrill investors are getting excited. After all, if these cuts go as planned, oil will increase in value, making SDRL a more profitable company.

What Investors Should Be Watching Ahead

Moving forward, things are looking good for SDRL. However, as we all know, things can change quickly in the market. In this case, and with regard to any other stock in the industry, it’s going to be important to continue watching supply and demand data. As production cuts continue, we’re likely to see further gains. However, if the cuts don’t continue, oil could spiral downward.

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[Image Courtesy of Pixabay]

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