As oil hits $103/barrel, one stock may climb along with it.
What does a coup d’etat in Egypt have to do with more jobs in America? Both appear to mean higher prices for drivers at the gas pump.
While Egypt isn’t much of an oil producer, it’s the country that controls the Suez Canal, the shipping shortcut between the Mediterranean and Red Sea. Political instability in Egypt can be seen as a potential threat to shipping lines. Nearly 4 million oil barrels move through the canal each day. During the overthrow of the Mubarak administration in 2011, fears that the canal would close sent oil prices above $100.
Meanwhile, a higher jobs number is a sign that businesses are buzzing and consuming more resources such as oil. This morning, the US Labor Department released jobs data showing an increase of 195,000 non-farm jobs versus the consensus average of 165,000.
Taken together, these two developments are believed to be the catalyst for higher oil prices this week. Since the start of this week, West Texas Intermediate Crude oil contracts have risen 6.7% to $103 per barrel while Brent Crude has risen 5.5% to $107.62.
So, what’s next for oil and is there a specific stock that can best play the oil market?
We talk numbers with Jonathan Krinsky, Chief Technical Market Analyst at Miller Tabak, on what prices we can expect for oil. We then ask CNBC contributor Abigail Doolittle, Technical Strategist at The Seaport Group, to chart the stock she feels investors should watch.
To hear Krinsky’s oil analysis and Doolittle’s stock chart analysis, watch the video above.
Please be sure to watch our guest host, Mandy Drury, on CNBC’s Street Signs, weekdays at 2:00pm Eastern Time.
- Commodity Markets
- oil prices