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Highlights
- Houston American Energy Corporation (NYSE American: HUSA, HUSA: US) is gaining attention on the stock markets as its stock zoomed by over 701 per cent in a week as of Monday, March 7.
- There is no specific news on the company’s front that would trigger such a wild rise in its stock prices. However, it seems to have gained momentum due to higher oil prices amid the Ukraine crisis.
- Stocks of Houston ballooned by roughly 850 per cent in the last one month.
Houston American Energy Corporation (NYSE American: HUSA, HUSA: US) has been gaining quite a bit of attention on the markets. Its stocks not only zoomed by over 701 per cent in a week, but also , rose by almost 495 per cent on Monday, March.
Houston American is a Texas-headquartered company with oil and gas assets in Texas and Louisiana. The company also holds three concessions in the Northern Putumayo Basin, Columbia.
Let’s find what could have caused this surge.
Why is HUSA stock surging?
There is no specific news on the company’s front that could trigger such a wild rise in its stock prices. However, it seems to have gained momentum due to higher oil prices amid the Ukraine crisis.
The advancement in the Russia-Ukraine war has led some Western nations to cut ties with Russia, one of the key exporters to the world market, which have put a pressure on the supply side of things against demand, leading to higher oil prices.
The West is now also talking about banning Russian energy suppliers, which could significantly squeeze the oil supply in the global markets, affecting European countries the most due to their reliance on Russian energy supplies.
HUSA stock rose sharply on Monday in the light of the speculations that the United States could raise its oil and natural gas produce in order to minimize its dependence of foreign energy supplies.
Also read: Vermillion (VET) & Athabasca (ATH): 2 TSX stocks to watch as oil soars
Houston American Energy’s financial performance in Q3 FY2021
Houston saw its oil and gas revenue reach US$ 0.29 million in the third quarter of fiscal 2021 compared to US$ 0.12 million in the same period a year ago.
The US$ 112-million market cap company reported a net loss of US$ 0.35 million in the latest quarter against a loss of US$ 0.25 million in Q4 2020.
The Houston-based oil and gas firm held property and equipment (net) worth US$ 4.96 million as of September 30, 2021, compared to US$ 5.01 million as of December 31, 2020.
Houston’s stock performance
Stocks of Houston ballooned by roughly 850 per cent in the last one month.
Having clocked a 52-week high of US$ 13.94, Houston scrip rose by almost 495 per cent to close at US$ 11.30 apiece on Monday, with 201 million shares switching hands during the session.
Bottomline
The global oil market could see a further rise in oil and gas prices if the energy supply remains weak with the move to ban Russian energy supplies from isolating its economy.
Russia, on the other hand, is threatening to cut the major gas pipeline to Germany in addition to the warnings that if the West ban its energy exports, oil prices would be unpredictable and might surge to at least US$ 300 per barrel.
Investors should keep all these latest news and economic factors (demand, supply, inflation) in mind before going ahead with oil and gas stocks in the prevailing market environment.
Also read: Cargojet (TSX:CJT) sees revenue zoom 26% in Q4. A cargo stock to buy?
