With Goldman Sachs projecting oil prices to hit $141 per barrel in the next few months, it is no wonder that alternative energy companies are in the investor spotlight, however will the solar stocks continue to benefit from surging oil prices?
Oil prices increased slightly last week (0.2%) however that follows an 8% rise in crude prices during week commencing 5th May. Surprisingly the oil price today (Monday) has actually fallen from the all time high that it set last week, despite the Goldman report.
Over the same two week period we have seen some dramatic gains in solar stocks on both the UK and USA stock markets. First Solar Inc (NASDAQ: FSLR), for example, opened on May 5th with a price of $274.22. It closed on Friday 16th May with a price of $311.14.
I see the investment news today that Solar Fun Power Holdings (NASDAQ: SOLF) has advanced 8% in pre market trading. That takes it’s stock price up to $24.73 before trading begins today.
It is not just USA solar stocks that are benefiting. PV Crystalox Solar Plc has risen by 10% to 182.75 pence on the London Stock Exchange this morning on the back of a strong sales projection.
So the solar sector is certainly hot news at the moment and rising oil prices and investor sentiment seem to drive these stocks higher. The issue for investors is whether this sector is over extending as it has done before. Time will tell, of course, but you can expect to see a flurry of action in this sector this afternoon.