Shares of leading oil producer Continental Resources, Inc.CLR hit a 52-week high of $45.92 during Thursday's trading session. However, the stock closed the session at $45.88, which reflects a solid return of 86.1% over the past six months. The average trading volume for the last three months aggregated 4,739,840 shares.
What is Driving Continental Resources?
Since the beginning of March, shares of this Zacks Rank #3 (Hold) stock have been witnessing an uptrend. Continental Resources' exposure to crude price volatility is resulting in its steady rise. The West Texas Intermediate (WTI) crude fell to a 12-year low mark of $26.21 per barrel in February. Now, this commodity is hovering around $50 per barrel, reflecting a whopping jump of as high as over 90%.
The surge in crude is being driven by supply outages in Nigeria, Libya, Venezuela and Canada - countries that hold some of the world's major sources of crude. The upward pressure in oil prices also reflect the U.S. Energy Department's recent inventory releases that show crude stockpile builds turning into draws. Further support has been lent by a continued decline in U.S. crude production and drop in oil-directed rigs - indicating a break in shale drilling activities.
Continental Resources is well positioned in the Mid-continent resource plays like SCOOP and STACK and enjoys a leading position in the Bakken play. This puts the upstream player in an advantageous position vis-à-vis any upside in crude prices. Its asset base has delivered and continues to provide stable returns and cash margins, which would enable the company to execute growth plans in the future.
CONTL RESOURCES Price and Consensus
Also, upward estimate revisions over the last 90 days added to Continental Resources' attractiveness. Analysts have become bullish on the company's growth prospects, thereby leading to the rise in estimates. The Zacks Consensus Estimate for 2016 narrowed to a loss of 92 cents per share from a loss of $1.03 per share over the last 90 days. A persistent rise in oil prices is therefore a major boon for Continental Resources.
Oklahoma City-based Continental is an independent exploration and production company. It is the largest leaseholder and one of the largest producers in the domestic oil space, the Bakken play of North Dakota and Montana. The company also has leading positions in Oklahoma, including its SCOOP Woodford and SCOOP Springer discoveries and the STACK and Northwest Cana plays.
Continental Resources currently carries a Zacks Rank #3 (Hold). Stocks worth considering include CVR Refining, LP CVRR , FutureFuel Corp. FF and ReneSola Ltd. SOL , each sporting a Zacks Rank #1 (Strong Buy).