Shares of Vanguard Natural Resources Jump 25% -- Here's Why

Image Source: Royal Dutch Shell investor presentation.

What: Shares of Vanguard Natural Resources are up just more than 25% as of 4:00 p.m. EST, as higher oil and gas prices have investors piling into energy stocks.

So What: After close to two years of watching oil and gas prices circle the drain, this week has been one of those few where investors in energy can breathe a small sigh of relief. West Texas Intermediate -- the domestic benchmark for crude oil -- ended the week above $35 for the first time in a couple of months. These high prices are being spurred on as more and more capital spending budgets come in, most of which are saying that companies expect to see their production decline as they invest less and less.

Before you get too excited about prices heading into Vanguard's earnings release, keep in mind that prices today have no bearing on its earnings results. Don't be surprised if a disappointing earnings result sends shares right back down.

Now What: Like so many stock price movements this week, it's hard to say whether this is the start of the recovery, or whether it's another blip in a long slog of low oil prices. Lower production hasn't really set in yet, and there are still plenty of wild cards out there that could boost supply or reduce demand. So don't take today's price jump at anything more than face value. Until Vanguard gets high-enough prices that it can start to clean up its balance sheet, and start back on the acquisition train, not much is going to change from a long-term perspective.

The article Shares of Vanguard Natural Resources Jump 25% -- Here's Why originally appeared on Fool.com.

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