Shares of solar and renewable-energy companies were gaining sharply on Monday, in sympathy with higher conventional-energy stocks. If one sector is sensitive to market fall and lower crude oil prices, it is the alternative energy sector — including solar energy. As the price of crude oil gains, the demand for alternative forms of energy becomes much stronger. This is why oil and solar stocks, for example, often trade similarly. Analysts in recent years have debated whether alternative energy stocks are directly correlated to the price of crude oil. Some contend that pricier oil pushes renewable energy companies higher, as investors and consumers search for cheaper alternatives to fossil fuels.
Yingli Green Energy Hold. Co. Ltd. (ADR) (NYSE:YGE), Trina Solar Limited (ADR) (NYSE:TSL), First Solar, Inc. (NASDAQ:FSLR) and SunPower Corporation (NASDAQ:SPWR) all were among noteworthy gainers.
Crude oil prices rose on Monday as investors shrugged off a U.S. refinery strike and focused on a falling U.S. rig count that signaled lower production down the line.
“There were a lot of people on the sidelines waiting for an opportunity to buy,” said Bjarne Schieldrop, chief commodity analyst at SEB.
“Brent has struggled sideways for a long time but it closed above the 20-day moving average on Friday for the first time since July, and the rig count is falling sharply. So now they think, maybe this is the time to buy.”
Brent crude speculators raised their net long positions by 1,056 contracts to 143,039 in the week to Jan. 27, ICE said on Monday, as some investors took the view that the oil price was beginning to bottom out. [O/ICE]
Both contracts rallied about 8 percent on Friday, fuelled by month-end short-covering and a record weekly drop in the number of U.S. oil rigs employed, according to industry data from Baker Hughes. The count is down 24 percent from its October peak.
“Most market observers have been surprised by the scale of the decrease, and expectations of U.S. oil output this year will no doubt be lowered accordingly,” analysts at Commerzbank said in a note. “The foundation for a steady price recovery in the second half of the year has thus been laid.”
However, in the short term the price increase has been exaggerated as there is still considerable oversupply, they said.
In the United States, union workers were on strike for a second day on Monday at nine refineries and chemical plants as they sought a new national contract with oil companies covering labourers at 63 plants.
This boosted refined oil products prices in the United States and Europe, as traders anticipated more arbitrage opportunities opening up to the west.
“Values are following through to the upside this morning as U.S. product markets gather additional bullish momentum off of labour strikes at several U.S. refiners,” Jim Ritterbusch, president at Ritterbusch & Associates, said in a research note.
One Reason Why Solar Stocks Are Up: Yingli Green Energy Hold. Co. Ltd. (ADR) (YGE), First Solar ...
No comments:
Post a Comment