Houston American Energy (NYSEMKT:HUSA) stock is up 160% on heavy trading volume today as oil prices hit a 14-year high. It seems investors are carefully following speculation that the U.S. might increase its domestic oil production.
HUSA stock finished trading March 4 at just $1.90. Shares had declined nearly 10% over the past year prior to today’s big move higher.
There is no specific news from the company that would move the share price upwards. Instead, the huge jump appears to be tied to the fast-rising price of oil and natural gas, as well as political comments out of Washington that America needs to lessen its reliance on foreign energy.
What Happened With HUSA Stock
Importantly, HUSA is moving along with other oil and gas stocks this morning. Crude oil prices continue to climb thanks to supply chain disruptions and talk of a ban on Russian oil imports.
Just how high are oil prices moving? Right now, West Texas Intermediate (WTI) crude is trading above $118 per barrel. At one point, the price touched $130 before pulling back. Brent crude, which is an international benchmark, is currently trading at $122 per barrel.
Why It Matters
Global oil prices are spiking as the U.S. and its allies are debating whether to ban Russian oil and natural gas imports. U.S. Secretary of State Antony Blinken said in a media interview over the weekend:
“We are now talking to our European partners and allies to look in a coordinated way at the prospect of banning the import of Russian oil while making sure that there is still an appropriate supply of oil on world markets.”
While Western sanctions against Russia have, so far, allowed the country’s energy trade to continue, most buyers are avoiding Russian products already. JPMorgan Chase says that 66% of Russian oil is struggling to find a buyer.
Concerns about the situation with Russia and Ukraine have sent the U.S. average for a gallon of gasoline at the pumps above $4 For Houston American, a tiny oil producer entirely based in Texas, the increased price of oil and focus on domestic suppliers could prove to be a boon for the company.
What’s Next for Houston American Energy
HUSA stock gets a much-needed bounce today as geopolitical issues propel the price of energy products to multi-year highs. How Houston American does in the long run remains to be seen. But in the near term, the stock is rising along with those of other oil and natural gas producers and suppliers.
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On the date of publication, Joel Baglole 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.
