Oil Stocks Drop, Travel Stocks Gain as Crude Prices Tumble

Nov 11, 2024

1 min read

Updated November 11, 2024

Source: Oil - iStock-1280963997

Key Takeaways

Stocks tied to oil prices saw notable shifts as crude futures dropped.
Oil prices declined following Israel's strike on Iran, which didn’t impact Iranian oil facilities.
Drilling and oilfield services stocks fell, while cruise and airline stocks rose.

Oil-sensitive stocks were among the most active in the S&P 500 on Monday as crude futures dropped sharply. The decline followed Israel’s retaliatory strike against Iran over the weekend, which did not disrupt Iranian oil production. This action eased concerns about potential supply interruptions, calming broader market fears.

West Texas Intermediate (WTI) crude prices plunged nearly 6% in late-morning trading as Iran’s oil output remained steady. Iran contributes about 4% of global oil supply, according to the U.S. Energy Information Administration (EIA).

Decline in Drilling and Oilfield Services Stocks

Shares of drilling companies like APA (APA), Diamondback Energy (FANG), and Devon Energy (DVN) dropped, along with oilfield services firms Halliburton (HAL) and SLB (SLB). Reflecting these declines, the SPDR S&P Oil & Gas Exploration and Production ETF reached its lowest level this month.

Travel Stocks Climb with Lower Fuel Costs

Conversely, shares of travel companies, including Carnival Corp. (CCL) and Delta Air Lines (DAL), surged, as lower oil prices signal reduced fuel costs for these businesses. Bank of America analysts raised their price targets for Norwegian Cruise Line Holdings (NCLH) and Royal Caribbean Cruises (RCL), noting that Carnival reported strong booking trends in September. Analysts expect similar positive outlooks from RCL and NCLH heading into 2025.