Why Is Clean Energy Fuels (CLNE) Stock Up Today?

One of the more interesting stocks investors are taking a closer look at today is Clean Energy Fuels (NASDAQ:CLNE). This interest has prompted some rather impressive price action with this company’s stock price. Currently, CLNE stock is trading more than 8% higher, outpacing the market by a wide margin today.

CLNE stock: Image of a Metro Local public transportation bus on Hollywood Blvd.
Source: ZikG / Shutterstock.com

This move is a welcome one for investors, given the price action for CLNE stock over the past week. Shares of Clean Energy Fuels have regained most of their losses from heavy selling pressure prior to the Federal Reserve interest rate hike decision. Then again, this directional move tracked the overall market, which was down mainly due to poor sentiment over this timeframe.

Indeed, there’s a lot to like when investors take a closer look at Clean Energy Fuels. This company’s focus is on utilizing natural gas as an alternative fuel source for commercial fleets. The company provides various forms of natural gas, with a focus on renewable natural gas. In addition, the company also builds, operates and maintains fueling stations and sells components necessary for equipment used to produce renewable natural gas.

For those bullish on a clean energy future, this is a company to look at. With a market capitalization of $2 billion, it’s also right in the wheelhouse for growth investors looking for a company with big upside.

That said, there’s another reason why Clean Energy Fuels is taking off today. Let’s dive into what investors are watching with this company.

What’s Driving CLNE Stock Higher Today?

As one might expect, demand for renewable natural gas is a function of the global energy market. As prices for conventional energy soars, typically higher priced renewable forms of energy become more attractive.

Today, the price of crude oil has surged past the $100 level once again. This move comes after a few days of declines, which sent crude on a very negative trajectory from its peak.

A recent U.S. Energy Information Administration (EIA) report on the subject highlights reasons for this spike. Of course, there’s the uncertainty that the Russian invasion of Ukraine, and the corresponding sanctions, provide for the supply-and-demand equation used to price energy. The potential for future sanctions, particularly on energy, are what led to the previous incredible spike in energy prices we saw. Accordingly, the experts seem to think that gasoline prices should remain elevated (above $4 per gallon) through the second quarter of this year. While a decline is expected during the latter half of 2022, that’s some impressive near-term pricing.

What this means for Clean Energy Fuels is hard to determine right now. Sure, clean energy is likely to come into focus as investors look for ways to play this rally. A rising tide lifts all boats, and Clean Energy Fuels’ margins should see a positive impact from this move.

However, over the longer term, there’s still a lot of uncertainty when it comes to energy prices. Accordingly, I expect this stock to be a volatile one for some time.

On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Chris MacDonald’s love for investing led him to pursue an MBA in Finance and take on a number of management roles in corporate finance and venture capital over the past 15 years. His experience as a financial analyst in the past, coupled with his fervor for finding undervalued growth opportunities, contribute to his conservative, long-term investing perspective.


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