Airlines and cruise stocks surge as oil prices plunge

Travel stocks are surging on Wednesday, with West Texas Intermediate crude futures down 5% as of 12 p.m. ET, largely on commodity traders’ hopes of a resolution to the US war with Iran.

The decline comes despite the US Energy Information Administration reporting a record plunge in US crude inventories last week. As the country expands its oil exports to reduce the impact of the war in Iran, inventories have fallen by 7.9 million barrels, according to the EIA, indicating a significant drop in domestic supply wiggle room ahead of the summer driving season. Per Reuters, analysts had expected a drop of 2.9 million.

Bloomberg noted that US oil exports have been crucial in keeping global petroleum prices in check, as supply remains historically constrained due to the effective closure of the Straight of Hormuz. Typically, such a sharper-than-expected drop in inventories would cause oil futures to rise.

Today, however, that is not the case and oil’s pain is travel stocks’ gain, with US airlines and cruise lines surging higher on Wednesday. Delta Air Lines, United Airlines, American Airlines, Southwest Airlines, and JetBlue were all up by at least 6%, while Carnival and Norwegian were up about 7%.

Royal Caribbean pared earlier losses from Mexico’s rejection of a large planned water park, but was still down about 1%.