Updated Aug 6 at 3:22pm ET.
Follow Coterra Energy to never miss an important update.
Oil prices rose as traders reacted to news of attacks on Saudi-backed forces in Yemen. These events often lead to higher prices because they create uncertainty about whether oil can safely move through the region.
For a producer like Coterra, higher oil prices are a direct boost to the bottom line. While the company also produces a lot of natural gas, its oil assets in the Permian Basin become more profitable whenever global tensions push crude prices higher.
Crude oil prices rose on Thursday following reports that Iran is considering a plan to restrict traffic through the Strait of Hormuz. This narrow waterway is one of the most important oil transit points in the world, and any threat to the flow of tankers through it typically sends energy prices higher.
As a major producer of oil and natural gas, Coterra benefits when the price of the commodities it sells goes up. While the company is currently focused on its merger with Devon Energy, its day-to-day profits remain closely tied to these global price swings. If these shipping restrictions lead to a lasting increase in oil prices, it would likely boost the cash Coterra brings in from its operations in the Permian Basin.
Source: CNBC
Analysts have maintained a steady stream of positive ratings for Coterra Energy over the past several months. Most analysts, 30 out of 55, rate the stock a buy, and the average target price of $42 suggests a 29% upside.
The company has a mixed record, missing expectations in six of the last eight quarters. This suggests the business is currently harder for analysts to predict than most of its peers.
Follow Coterra Energy to get the latest and most important updates.
Follow CTRA