Abraxas Petroleum (AXAS) Stock Flies: Here’s Why

Abraxas Petroleum AXAS Stock News

Abraxas Petroleum Corp. (NASDAQ: AXAS) is running for the top in the premarket hours this morning, following up on the tremendous gains that we saw from the stock yesterday. However, if you’re looking for press releases or SEC filings, you’re not going to find much. The company hasn’t issued any news. So, what’s the deal?

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Here’s Why AXAS Stock Is Climbing

As mentioned above, Abraxas Petroleum has seen a dramatic climb in value as of late. However, the last news from the company came more than 2 weeks ago when investors learned that it had fallen out of compliance with NASDAQ listing requirements.

So, why is the stock climbing?

It all has to do with a Tweet that President Trump recently sent out about Iran. Here’s the Tweet:

As you can see, in the Tweet President Trump outlined very aggressive plans to shoot down any Iranian gunboats that harass US ships at sea. So, what does this have to do with AXAS stock? Just about everything!

First and foremost, the United States and Iran are two of the world’s top oil producers. The past shows us that when geopolitical tensions are high among oil producers, production zones, refineries, ships, and other key parts of the oil supply chain become targets.

Moreover, the fact that the US and Iran are at it agian puts key oil production allies in the middle east at risk. Let’s not forget about an attack on Saudi Arabia’s key refinery that took place just months before the COVID-19 pandemic broke, sending oil skyrocketing.

While this is not good news from a geopolitical standpoint, nor an economic standpoint, it is great news for oil companies as the geopolitical fears will likely continue to lead prices higher, making margins more enjoyable.

Where Is Oil Headed Ahead?

Moving forward, if you’re an Abraxas Petroleum investor, or an investor in any oil-related company, you likely have a lot to look forward to. Ultimately, the sector has been hit hard by the COVID-19 pandemic, sending prices to dramatic lows.

However, economies are starting to slowly open back up. This will likely lead to a slow, yet steady boost in the demand for oil, helping to lift prices.

This in combination with the tensions in the Middle East have some experts suggesting that oil could climb to be worth more than $100 per barrel by Summer. While I’m not that optimistic, I am watching AXAS stock and others very closely as I do believe that strong gains could be ahead.

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