The OPEC production cut deal has propelled crude oil prices to their highest levels of the past year. While high oil prices are a lifeline for struggling oil and gas production companies, they will also be a drag on profits for a number of other companies.
Every day that passes, it seems more likely that the oil market has bottomed. The oil market will now re-balance over time, even if it takes several years to get there. With oil prices at or below $50 per barrel for the past year, it’s easy to forget that WTI crude spent most of the past decade in the $75 to $100 per barrel range.
Some companies rely so heavily on oil in their businesses that higher oil prices could drive up costs enough to have a serious impact on their stocks. For those companies, the oil downturn has been a blessing. The recovery could be a curse.
With that as a backdrop, here are three companies you should sell before high oil prices go even higher.